Board Reforms and Dividend Policy: International Evidence

Journal of Financial and Quantitative Analysis, Forthcoming

46 Pages Posted: 3 Mar 2020 Last revised: 18 May 2020

See all articles by Kee-Hong Bae

Kee-Hong Bae

York University - Schulich School of Business

Sadok El Ghoul

University of Alberta - Campus Saint-Jean

Omrane Guedhami

University of South Carolina - Moore School of Business

Xiaolan Zheng

University of Nottingham, Ningbo China -Nottingham University Business School China

Date Written: February 4, 2020

Abstract

We study the impact of board reforms implemented in 40 countries worldwide on corporate dividend policy. Using a difference-in-differences analysis, we find that firms pay higher dividends following the reforms. The increase in dividend payouts is more pronounced for firms with weak board governance in the pre-reform period and those in countries with strong external governance mechanisms. Our findings corroborate the dividend outcome model, which postulates that board reforms strengthen the monitoring role of the board and empower outside shareholders to force management to disgorge dividends.

Suggested Citation

Bae, Kee-Hong and El Ghoul, Sadok and Guedhami, Omrane and Zheng, Xiaolan, Board Reforms and Dividend Policy: International Evidence (February 4, 2020). Journal of Financial and Quantitative Analysis, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3531413 or http://dx.doi.org/10.2139/ssrn.3531413

Kee-Hong Bae

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-2100 ext) 20248 (Phone)
416-736-5687 (Fax)

Sadok El Ghoul (Contact Author)

University of Alberta - Campus Saint-Jean ( email )

Edmonton, Alberta T6G 2R3
Canada
780-465-8725 (Phone)
780-465-8760 (Fax)

Omrane Guedhami

University of South Carolina - Moore School of Business ( email )

Columbia, SC
United States

Xiaolan Zheng

University of Nottingham, Ningbo China -Nottingham University Business School China ( email )

199 Taikang East Road
AB 469
ningbo, Zhejiang 315100
China

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
128
Abstract Views
816
rank
248,917
PlumX Metrics