Political corruption and corporate payouts
Ashrafee Tanvir Hossain,
Takdir Hossain and
Journal of Banking & Finance, 2021, vol. 123, issue C
Firms headquartered in more corrupt US environments (states) provide higher payouts to their shareholders. Our results are robust to, for example propensity score matching, instrumental variable approach, headquarters relocations, quasi natural experiments using exogenous shocks, use of alternative measures of corruption and payouts, use of additional (possibly omitted) variables, and various alternative explanations based on additional channels and moderating factors. Our study finds that the use and marginal value of dividend payout as a shielding channel is affected by state-level corruption. Our study also adds geographic-based shielding as another important motivation for firms to make corporate payouts.
Keywords: Dividend payout; Political corruption; Political favor(s); Rent-seeking shielding; State & local government (search for similar items in EconPapers)
JEL-codes: D73 G30 G35 H7 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:123:y:2021:i:c:s0378426620302776
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