Culture and payout policy: International evidence

Mohamed Nasrallah Khiar and Maher Kooli

Journal of Multinational Financial Management, 2023, vol. 70-71

Abstract: The purpose of the study is to examine the effect of national culture on corporate payout mix policy (dividends and share repurchases). Using an extensive data set covering 55 countries during 1980–2018, we find that the national cultural dimension significantly affects the payout policy mix, choice, and levels. Firms in countries with high uncertainty avoidance, masculinity, long-term orientation, and indulgence vs. restraint are inclined to pay out through share repurchases. In contrast, firms in countries with low uncertainty avoidance, masculinity, long-term orientation, and indulgence vs. restraint tend to pay out through dividends. Our findings are robust to control for firm and country characteristics, alternative payout ratios, different culture proxies, sub-period samples, and subsamples.

Keywords: National culture; Dividend policy; Share repurchase policy; Agency theory (search for similar items in EconPapers)
JEL-codes: G15 G35 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:70-71:y:2023:i::s1042444x23000427

DOI: 10.1016/j.mulfin.2023.100823

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