Unlocking Dividends: The impact of managerial social capital on international corporate payouts

Douglas Cumming, David Javakhadze and Tijana Rajkovic

Journal of International Financial Markets, Institutions and Money, 2024, vol. 95, issue C

Abstract: We present robust international evidence that managerial social capital is a significant determinant of dividend policy worldwide. Our analysis reveals that social capital mitigates information asymmetry and financial constraints, thereby resulting in increased dividend payouts. The effect is particularly pronounced for firms anticipating high cash retention costs. These findings are consistent with the pecking-order perspective of corporate payouts. Moreover, we identify a significant moderating role of shareholder legal protection and national cultural characteristics. Our results remain robust across alternative model specifications and tests for endogeneity.

Keywords: Dividend policy; Social capital; Social networks; International (search for similar items in EconPapers)
JEL-codes: G35 Z13 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:95:y:2024:i:c:s104244312400091x

DOI: 10.1016/j.intfin.2024.102025

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