Related party transactions and dividend payouts

Moataz El-Helaly and Bilal Al-Dah

Finance Research Letters, 2022, vol. 49, issue C

Abstract: This paper examines the association between Related Party Transactions (RPTs) and dividend payouts. Using a sample drawn from the S&P 1,500 firms and hand collected RPTs data between 2011 and 2018, we find that the magnitude of RPTs, measured by the number of transactions, is positively associated with the dividend yield. Additionally, we find that this relationship is mainly driven by RPTs that are classified as less opportunistic by prior studies. Our findings suggest that, when the magnitude of RPTs increases, firms tend to increase dividends to mitigate agency conflicts as agency problems become more prevalent.

Keywords: Dividends; Related party transactions (search for similar items in EconPapers)
JEL-codes: G35 M41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003385

DOI: 10.1016/j.frl.2022.103114

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