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Corporate hedging and dividend policy: An empirical study of Korean firms

Young Mok Choi, Kunsu Park and Woo Sung Kim

Finance Research Letters, 2020, vol. 32, issue C

Abstract: This study examines whether corporate hedging is associated with dividend payouts. Using a sample of firms listed on the Korea Stock Exchange (KSE) between 2002 and 2017, we find that firms with a higher use of property-liability insurance pay more dividends. This finding is robust to endogeneity issues and alternative proxies for dividend payouts. Overall, our empirical evidence sheds light on the effect of hedging with property-liability insurance on a firm's dividend decisions.

Keywords: Corporate hedging; Property-liability insurance; Cash flow uncertainty; Dividend payout (search for similar items in EconPapers)
JEL-codes: G22 G32 G35 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:32:y:2020:i:c:s1544612318306378

DOI: 10.1016/j.frl.2018.12.034

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