Independent directors and the propensity to pay dividends

Sharma, Vineeta D.

doi:10.1016/j.jcorpfin.2011.05.003

Cited by 133 publications

(174 citation statements)

References 58 publications

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“…These results are consistent with some studies (White, 1996;Farinha, 2003) but inconsistent with others (Hu and Kumar, 2004;Sharma, 2011). We note that among the related studies, ours is the only one that employs a natural experiment to solve the endogeneity problem.…”

Section: Board Independence and Managerial Risk-taking And Payout Policysupporting

confidence: 86%

“…We also control for the lagged equity volatility to alleviate the omitted variable bias (Brick et al, 2012). The control variables in the payout regressions include CEO tenure, firm size, ROA, market-to-book ratio, sales growth rate, firm age, leverage, cash balance, CEO shareholdings, CEO un-exercisable and exercisable options, and stock return (Hu and Kumar, 2004;Skinner, 2008;Sharma, 2011).…”

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confidence: 99%

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Does Board Independence Reduce the Cost of Debt?

Bradley

Dong

2014

SSRN Journal

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Using the passage of the Sarbanes-Oxley Act and the associated change in listing standards as a natural experiment, we find that while board independence decreases the cost of debt when credit conditions are strong or leverage low, it increases the cost of debt when credit conditions are poor or leverage high. We also document that independent directors set corporate policies that increase firm risk. These results suggest that, acting in the interest of shareholders, independent directors are increasingly costly to bondholders with the intensification of the agency conflict between these two stakeholders.

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Section: Board Independence and Managerial Risk-taking And Payout Policysupporting

confidence: 86%

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confidence: 99%

Does Board Independence Reduce the Cost of Debt?

Bradley

Dong

2014

SSRN Journal

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“…5, No. 7; Denis and Osobov (2007), Vineeta (2011) andDarren Henry (2011) we use regression models "LOGIT" to examine the influence of different shareholders on the decision to distribute dividends. The last step in our analysis will provide an opportunity to study the sensitivity of our results using a "LOGIT" regression analysis, which provides empirical determinants of the probability of firms to pay dividends.…”

Section: Modelsmentioning

confidence: 99%

Dividends and Problem of Separation of Ownership and Control: Theory and Evidence from French Firms

Said¹

2013

IJEF

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This paper examines the determinants of dividends payout by focusing on the role of institutional and managerial ownership factors. It also highlights the impact of controlling shareholders on dividends payout ratios. It empirical studies the French context using a sample of 246 firms over a period of 11 years, extending from 1997 to 2007. The results indicate an inverse relationship between dividends payout and institutional ownership and support the negative effect of managerial ownership. The paper concludes, however, with the invalidity of the wealth expropriation hypothesis of minority shareholders by the controlling shareholders in both static and dynamic frameworks.

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“…By contrast and despite suggestions that dividend policy is determined by corporate boards and top executives (Borokhovich et al, 2005;Ghosh & Sirmans, 2006;How et al, 2008;Al-Najjar & Hussainey, 2009;Borokhovich et al, 2013;Ghasemi et al, 2013), existing studies examining the effect of corporate governance on dividend pay-out are rare (How et al, 2008;Ghosh & Sirmans, 2006;Zhang, 2008;Al-Najjar & Hussainey, 2009;Harada & Nguyen, 2011;Jiraporn et al, 2011;Litai et al, 2011). Third, the limited prior studies examining the impact of corporate governance on dividend pay-out have also focused almost exclusively on large listed public corporations to the neglect of SMEs (Sharma, 2011;Subramaniam & Devi, 2011;Al-Swidi et al, 2012;Al-Taleb et al, 2012;Gill & Obradovich, 2012;Thanatawee, 2012;Abor & Fiador, 2013;Arshad et al, 2013). Finally, despite increasing evidence that poor corporate governance practices played a role in instigating the 2007/08 global financial crisis (Al-Bassam et al, 2015), there have been limited empirical studies, and inadequate critical reflections on the role of good governance on a number of organisational outcomes, such as dividend policy following the crisis.…”

Section: Introductionmentioning

confidence: 99%