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Corporate Governance and Dividend Policy in Poland

Author

Listed:
  • Oskar Kowalewski
  • Ivan Stetsyuk
  • Oleksandr Talavera

Abstract

This study examines the relation between corporate governance practices measured by Transparency Disclosure Index (TDI) and dividend policy in Poland. Our empirical approach, constructs measures of the quality of the corporate governance for 110 non-financial companies listed on Warsaw Stock Exchange between 1998 and 2004. We find evidence that an increase in the TDI or its subindices leads to an increase in the dividend-to-cash-flow ratio. These results support the hypothesis that companies with weak shareholder rights pay dividends less generously than do firms with high corporate governance standards. Therefore, minority shareholders often use power to extract dividends. We also find that large and more profitable companies have a higher dividend payout ratio, while riskier and more indebted firms prefer to pay lower dividends.

Suggested Citation

  • Oskar Kowalewski & Ivan Stetsyuk & Oleksandr Talavera, 2007. "Corporate Governance and Dividend Policy in Poland," Discussion Papers of DIW Berlin 702, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp702
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    References listed on IDEAS

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    1. Chris Mallin, 2000. "Developments in Corporate Governance in Central and Eastern Europe," Corporate Governance: An International Review, Wiley Blackwell, vol. 8(1), pages 43-51, January.
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    4. William Judge & Irina Naoumova, 2004. "Corporate Governance in Russia: what model will it follow?," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(3), pages 302-313, July.
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    7. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 2000. "Agency Problems and Dividend Policies around the World," Journal of Finance, American Finance Association, vol. 55(1), pages 1-33, February.
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    12. Larry H. P. Lang & Mara Faccio & Leslie Young, 2001. "Dividends and Expropriation," American Economic Review, American Economic Association, vol. 91(1), pages 54-78, March.
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    Cited by:

    1. Dzidic, Ante, 2014. "Dividend Policy Of Public Companies In Bosnia And Herzegovina," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 5(1), pages 1-10.
    2. Darakhshan Younis & Attiya Yasmin Javid, 2014. "Market Imperfections and Dividend Policy Decisions of Manufacturing Sector of Pakistan," PIDE-Working Papers 2014:99, Pakistan Institute of Development Economics.
    3. Marinko Škare & Tea Hasić, 2016. "Corporate governance, firm performance, and economic growth -- theoretical analysis," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 17(1), pages 35-51, February.
    4. Gehan A. Mousa, 2014. "The Association between Accounting Conservatism and Cash Dividends: Evidence from Emerging Markets," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(4), pages 210-220, October.
    5. Zubaida Batool & Attiya Yasmin Javid, 2014. "Dividend Policy and Role of Corporate Governance in Manufacturing Sector of Pakistan," PIDE-Working Papers 2014:109, Pakistan Institute of Development Economics.
    6. Lee, King Fuei, 2010. "Retail minority shareholders and corporate reputation as determinant of dividend policy in Australia," Pacific-Basin Finance Journal, Elsevier, vol. 18(4), pages 351-368, September.
    7. L. Ruzhanskaia & S. Luk'ianov, 2011. "Characteristics of the Dividend Policy of Russian Companies and the Interests of Investors," Problems of Economic Transition, Taylor & Francis Journals, vol. 54(2), pages 75-92.
    8. repec:rsr:journl:v:65:y:2017:i:3:p:81-92 is not listed on IDEAS
    9. Nabaraj Adhikari, Ph.D., 2015. "Determinants of Corporate Dividend Payout in Nepal," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 27(2), pages 1-22, October.
    10. Eliasu Nuhu & Abubakar Musah & Damankah Basil Senyo, 2014. "Determinants of Dividend Payout of Financial Firms and Non-Financial Firms in Ghana," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(3), pages 109-118, July.
    11. L. Ruzhanskaya & S. Lukyanov., 2010. "Dividend Policy of Russian Companies and the Investors’ Interests," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.

    More about this item

    Keywords

    Corporate governance; dividend policy; agency theory;

    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
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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