Monitoring from the Sky: Big Data and Dividend Policy

Using staggered releases of real-time satellite data of retail firms’ parking lot traffic as a quasi-natural experiment, we find that retailers significantly increase dividend payouts after their satellite data is released to investors. The dividend increase is more pronounced for firms with low growth opportunities or poor corporate governance. Retailers fund the dividend increase by reducing asset growth and cutting executive compensation while keeping R&D investment and external financing intact. These results support the outcome model of dividend and demonstrate that alternative data can serve as an effective governance mechanism by reducing the information gap between managers and outside investors.

Keywords: Alternative Data; Satellite Imagery Data; Dividend Policy; Agency Theory; Corporate Governance

JEL Classification: G31, G32, G34, G35

Suggested Citation: Suggested Citation

Liu, Clark and Qiu, Yancheng and Shu, Tao and Wang, Shujing, Monitoring from the Sky: Big Data and Dividend Policy (May 29, 2022). Available at SSRN: https://ssrn.com/abstract=3988482 or http://dx.doi.org/10.2139/ssrn.3988482