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Culture and payout policy: International evidence

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  • Khiar, Mohamed Nasrallah
  • Kooli, Maher

Abstract

The purpose of the study is to examine the effect of national culture on corporate payout mix policy (dividends and share repurchases). Using an extensive data set covering 55 countries during 1980–2018, we find that the national cultural dimension significantly affects the payout policy mix, choice, and levels. Firms in countries with high uncertainty avoidance, masculinity, long-term orientation, and indulgence vs. restraint are inclined to pay out through share repurchases. In contrast, firms in countries with low uncertainty avoidance, masculinity, long-term orientation, and indulgence vs. restraint tend to pay out through dividends. Our findings are robust to control for firm and country characteristics, alternative payout ratios, different culture proxies, sub-period samples, and subsamples.

Suggested Citation

  • Khiar, Mohamed Nasrallah & Kooli, Maher, 2023. "Culture and payout policy: International evidence," Journal of Multinational Financial Management, Elsevier, vol. 70.
    • Handle: RePEc:eee:mulfin:v:70-71:y:2023:i::s1042444x23000427
    DOI: 10.1016/j.mulfin.2023.100823
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    More about this item

    Keywords

    National culture; Dividend policy; Share repurchase policy; Agency theory;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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