Monitoring from the Sky: Big Data and Dividend Policy

57 Pages Posted: 2 Mar 2022 Last revised: 31 May 2022

See all articles by Clark Liu

Clark Liu

Tsinghua University - PBC School of Finance

Yancheng Qiu

Hong Kong University of Science & Technology (HKUST)

Tao Shu

The Chinese University of Hong Kong, Shenzhen; Shenzhen Finance Institute

Shujing Wang

Tongji University

Date Written: May 29, 2022

Abstract

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

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

Clark Liu

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengdu Road
Haidian District
Beijing 100083
China

Yancheng Qiu

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong

Tao Shu (Contact Author)

The Chinese University of Hong Kong, Shenzhen ( email )

Shenzhen Finance Institute ( email )

Shujing Wang

Tongji University ( email )

Shanghai
China

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