Corporate Governance and Dividend Reinvestment Plans: Insights from Imputation Tax in Australia

Hussein Abedi Shamsabadi, Imen Tebourbi, Mohammad Nourani and Byung S. Min

Finance Research Letters, 2021, vol. 41, issue C

Abstract: This paper investigates the supply of Dividend Reinvestment Plans (DRPs) in relation to corporate governance and imputation tax system in Australia. Since DRPs are popular among large firms, we compiled the data of 300 largest companies listed on the Australian stock exchange (ASX300) during 2001-2013. Tobit regression method is used to estimate the models. Results indicate that good corporate governance leads to the higher supply of DRPs. We also found that franked dividend and heavily discounted DRPs weaken the positive association between governance and DRPs, illustrating the importance of institutional settings. Our findings imply that good corporate governance should consider a variety of clientele demands for dividend policy.

Keywords: Dividend reinvestment plans; Corporate governance; Imputation tax; Dividend policy; Australia (search for similar items in EconPapers)
JEL-codes: G32 G34 G35 H25 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:41:y:2021:i:c:s154461232031624x

DOI: 10.1016/j.frl.2020.101810

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