Corporate social responsibility and dividend policy in Sri Lankan firms: A data triangulation approach

Abstract

This study investigates the relationship between corporate social responsibility (CSR) and dividend policy (DP) using a data triangulation approach in the Sri Lankan context. The findings of the secondary data approach suggest that there is a positive impact from environmental and social CSR on both the likelihood to pay dividends and its payout. Findings of the primary data approach propose that ethical and philanthropic CSR dimensions show a positive impact on both likelihood to pay dividends and its payout. The findings of the triangulation approach revealed that CSR and DP tend to rise together. Hence, we argue that the generosity of the management paves the way towards shareholders' prosperity. This is the first study to investigate the CSR‐DP puzzle using a data triangulation approach. Future researchers could use this study as a guideline, if they intend to conduct a research study through data triangulation approaches especially in dividend policy and also in finance discipline.

Corporate social responsibility and dividend policy in India

“…Additionally, the findings suggest that high-transparency firms have stable dividend payouts. Dewasiri and Abeysekera (2020) also identify a positive link between CSR and the propensity of paying dividends as well as dividend payout. Similar findings are reported by Sheikh (2020), although the author contends that this relationship only holds when there is low market competition.…”

Unveiling the ESG-dividend nexus: the moderating role of investor protection and regulatory enforcement

“…Several studies have investigated the relationship between ESG and corporate dividend choices in various nations. Nevertheless, the results are inconclusive because although most research has shown a positive link between ESG and dividend payout in different situations (Cheung et al, 2016;Dewasiri and Abeysekera, 2020;Ellili, 2022;Vasconcelos et al, 2022;Barros et al, 2023;Bilyay-Erdogan et al, 2023;Lakhal et al, 2023), some studies have also indicated a negative association (Niccolo et al, 2020;Saeed and Zamir, 2021).…”

“…The prior body of research concerning the link between ESG aspects and dividend payments has provided inconclusive results, necessitating further investigation to achieve better clarity (Cheung et al, 2016;Benlemlih, 2019;Dewasiri and Abeysekera, 2020;Matos et al, 2020;Saeed and Zamir, 2021;Vasconcelos et al, 2022;Bilyay-Erdogan et al, 2023). The majority of studies on the ESG-dividend nexus have focused on developed economies or taken a global perspective (Cheung et al, 2016;Bilyay-Erdogan et al, 2023).…”

“…However, ESG scores efficiently minimize this negative effect by fostering a greater probability of paying dividends. Dewasiri and Abeysekera (2020) discovered that CSR, particularly environmental and social CSR, favorably impacted the dividend distribution of Sri Lankan firms. Investments in CSR must be matched by higher dividend distributions.…”

An empirical investigation of determinants of corporate social performance using multi‐dimensional panel data analysis

“…Stakeholder management theory has two important implications for the study of CSP. First, it induces the creation of multiple dimensions of CSP such as environmental responsibility, employees' welfare, customers' welfare shareholders' welfare, government, community, affirmative action, and transparent accounting practices instead of one aggregate category of social responsibility (Dewasiri & Abeysekera, 2020; Lee, 2008). Second, it proposes that the corporate governance (CG) approach can also improve CSP by promoting sound business practices (Kaymak & Bektas, 2017).…”