Democracy and dividend policy around the world

Thi Tuyet Mai Nguyen and Quoc Trung Tran

The North American Journal of Economics and Finance, 2022, vol. 62, issue C

Abstract: This paper investigates how democracy influences corporate dividend policy. With a sample of 228,628 observations from 37 countries, we find that democracy is negatively associated with both the likelihood to pay dividends and the payout ratio. Moreover, we document that this effect is stronger when shareholders (creditors) are weakly (strongly) protected. These findings imply that the effect of democracy on corporate dividend policy is transmitted mainly through democratic procedures. Besides, we find that democracy also negatively affects dividend initiations.

Keywords: Democracy; Dividend policy; Democratic procedures; Shareholder protection; Creditor protection (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2022
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:ecofin:v:62:y:2022:i:c:s1062940822000651

DOI: 10.1016/j.najef.2022.101713

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