Monitoring from the Sky: Big Data and Dividend Policy
57 Pages Posted: 2 Mar 2022 Last revised: 31 May 2022
Date Written: May 29, 2022
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