INVESTOR CONFIDENCE, CORPORATE GOVERNANCE, STOCK LIQUIDITY AND DIVIDEND POLICY

Muhammad Rizwan (), Muhammad SadiqShahid () and Muhammad Hassan Bucha3 ()
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Muhammad Rizwan: Middlesex University, UK
Muhammad SadiqShahid: Bahauddin Zakariya University, Multan
Muhammad Hassan Bucha3: Bahauddin Zakariya University, Multan

IBT Journal of Business Studies (JBS), 2016, vol. 12, issue 1, 307-327

Abstract: Purpose The objective of this study is to examine the impact of investor confidence, corporate governance and stock liquidity on dividend policy of firms listed on Pakistan stock exchanges from 20102015.The liquidity constraint enabled a superior association with the interests of the controlling shareholders, particularly outside investors, which make a significant enhancement in firms’ liquidity and governance.Findings Our results indicate that dividends have a less significant impact on investor confidence after the corporate governance.Practical Implication Our interpretation is that the improvement in corporate governance, especially the improvement in the alignment between growth opportunities and cash dividends, may take longer time to emerge.These findings provide strong evidence that shift in corporate governance and stock liquidity influence dividend policy of a firm in a substantial manner.Another implication is that stock liquidity matters in firms’ dividend decision making the liquidity deficiency is compensated by large cash dividends.

Keywords: Dividend Policy; Corporate Governance; Investor Confidence and Stock Liquidity (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:aib:ibtjbs:v:12:y:2016:i:1:p:307-327

DOI: 10.46745/ilma.ibtjbs.2016.121.18

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