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Organization capital, dividends and firm value: International evidence

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  • Chasiotis, Ioannis
  • Loukopoulos, Georgios
  • Toudas, Kanellos

Abstract

This study investigates the relationship between organization capital, dividends, and firm value across 61 countries. We find that firms with higher organization capital distribute more dividends. By exploiting changes in the stringency of national labor regulations, we demonstrate that this effect strengthens when labor markets become more flexible. Additionally, we document that the market places a premium on dividend payouts from firms with higher organization capital. Further analysis reveals that this premium differential and the positive organization capital-dividend payouts relationship, are more pronounced in firms and countries marked by substantial agency issues. The robustness of our evidence is affirmed through several endogeneity tests, supporting the agency view of organization capital.

Suggested Citation

  • Chasiotis, Ioannis & Loukopoulos, Georgios & Toudas, Kanellos, 2024. "Organization capital, dividends and firm value: International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:intfin:v:97:y:2024:i:c:s1042443124001409
    DOI: 10.1016/j.intfin.2024.102074
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    More about this item

    Keywords

    Organization capital; Intangible capital; Dividends; Payout policy; Firm value; Agency theory;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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