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http://ssrn.com/abstract=1068281
 
 

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Agency Conflicts and Corporate Payout Policies: A Global Study


Söhnke M. Bartram


London Business School - Department of Finance; Warwick Business School - Department of Finance

Philip R. Brown


University of Western Australia - Department of Accounting and Finance; University of New South Wales - Australian School of Business; Lancaster University - Department of Accounting and Finance; Financial Research Network (FIRN)

Janice C. Y. How


Queensland University of Technology; Financial Research Network (FIRN)

Peter Verhoeven


Queensland University of Technology - Faculty of Business; Financial Research Network (FIRN)

March 13, 2012


Abstract:     
We investigate the roles of firm and country level agency conflicts in determining corporate payout policies. Based on a large sample of 29,610 firms in 43 countries from 2001 to 2006, we find that in high protection countries, investors are able to use their legal powers to extract cash from firms but their ability to do so can be substantially hindered when agency costs at the firm level are high. In poor protection countries, investors can seek refuge in firm level governance mechanisms to curb agency conflicts, suggesting a substitution between country and firm level investor protection. Finally, compared to repurchases, we find dividends are more likely to be the sole method of payout in high protection countries and in less closely held firms.

Number of Pages in PDF File: 49

Keywords: Dividends, share repurchases, agency costs, payout choice

JEL Classification: G3, F4, F3

working papers series


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Date posted: March 6, 2008 ; Last revised: March 10, 2014

Suggested Citation

Bartram, Söhnke M. and Brown, Philip R. and How, Janice C. Y. and Verhoeven, Peter, Agency Conflicts and Corporate Payout Policies: A Global Study (March 13, 2012). Available at SSRN: http://ssrn.com/abstract=1068281 or http://dx.doi.org/10.2139/ssrn.1068281

Contact Information

Söhnke M. Bartram
London Business School - Department of Finance ( email )
Sussex Place
Regent's Park
London NW1 4SA
United Kingdom
+44 (20) 7000 8270 (Phone)
+44 (20) 7000 8201 (Fax)
Warwick Business School - Department of Finance ( email )
Coventry, CV4 7AL
United Kingdom
+44 (24) 7657 4168 (Phone)
+1 425 952 1070 (Fax)
HOME PAGE: http://go.warwick.ac.uk/sbartram/
Philip R. Brown (Contact Author)
University of Western Australia - Department of Accounting and Finance
School of Business, M250
35 Stirling Highway
Crawley WA 6009
Australia
+61 8 6488 2899 (Phone)
+61 8 6488 1047 (Fax)
University of New South Wales - Australian School of Business ( email )
Sydney, NSW 2052
Australia
Lancaster University - Department of Accounting and Finance ( email )
Lancaster LA1 4YX
United Kingdom
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Janice C. Y. How
Queensland University of Technology ( email )
GPO Box 2434
Brisbane, Queensland 4000
Australia
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Peter Verhoeven
Queensland University of Technology - Faculty of Business ( email )
Brisbane, Queensland 4001
Australia
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

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