Corporate integrity culture and dividend policy

Rajesh Kumar Sinha and Harshali Damle

Journal of Behavioral and Experimental Finance, 2025, vol. 46, issue C

Abstract: We examine whether and how the corporate integrity culture affects a firm's dividend policy. Using a validated time-variant measure of firm-level integrity culture, we find that integrity culture increases firms' dividend payout: a one standard deviation increase in integrity culture is associated with an increase of 9.89 % of the mean dividend yield. We also find that integrity culture positively influences dividends through financial constraint and firm risk channels. Our study is robust to endogeneity tests, including an instrumental variable approach using state-level corruption convictions and organ donation as instrumental variables and difference-in-difference methods employing the global financial crisis and the COVID pandemic as an exogenous shock.

Keywords: Dividend policy; Integrity; Corporate culture (search for similar items in EconPapers)
JEL-codes: G35 G41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:46:y:2025:i:c:s2214635025000097

DOI: 10.1016/j.jbef.2025.101028

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