IDEAS home Printed from
   My bibliography  Save this paper

Dividend payout, corporate governance, and the enforcement of creditor rights in emerging markets


  • Thomas O'Connor

    () (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)


In this paper I examine the relationship between the strength of creditor rights, their enforcement, corporate governance and corporate dividend payout in a sample of 281 emerging market firms. I show that the outcome model of dividends, which states that corporate dividend payout increases in the strength of corporate governance, holds in emerging markets, but only where the legal enforcement of creditor rights is strong. Where legal enforcement is weak, the shareholders of better-governed firms are not able to use their legal rights to extract large dividends from firms. The shareholders of better-governed firms are unable to extract large dividends from firms irrespective of the strength of creditor rights. That is, differences in creditor rights are not systematically related to dividend payout in the way predicted by the agency costs of debt and equity version of the outcome model of dividends.

Suggested Citation

  • Thomas O'Connor, 2012. "Dividend payout, corporate governance, and the enforcement of creditor rights in emerging markets," Economics, Finance and Accounting Department Working Paper Series n227-12.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  • Handle: RePEc:may:mayecw:n227-12.pdf

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Djankov, Simeon & McLiesh, Caralee & Shleifer, Andrei, 2007. "Private credit in 129 countries," Journal of Financial Economics, Elsevier, vol. 84(2), pages 299-329, May.
    2. Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 2000. "Investment-Cash Flow Sensitivities are Useful: A Comment on Kaplan and Zingales," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 695-705.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Corporate governance; Creditor rights; Legal enforcement; Agency models of dividends; Dividend payout; Emerging markets.;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:may:mayecw:n227-12.pdf. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Candi Patterson) or (Katrina Wingle). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.