How product market competition affects dividend payments in a weak investor protection economy: Evidence from Taiwan

Lanfeng Kao and Anlin Chen

Pacific-Basin Finance Journal, 2013, vol. 25, issue C, 21-39

Abstract: We examine the link between the intensity of product market competition and the dividend models of agency conflicts in an economy with weak investor protection (Taiwan). Product market competition can substitute for governance mechanisms. Our results show that the outcome agency model of dividends is applicable only when the product market is highly competitive. However, the substitute agency model of dividends is supported when the product market has low competitiveness. Product market competition alleviates the effects of agency conflicts and corporate governance practices on dividend policies.

Keywords: Agency conflict; Corporate governance; Dividend policy; Investor protection; Product market competition (search for similar items in EconPapers)
JEL-codes: G34 G35 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:25:y:2013:i:c:p:21-39

DOI: 10.1016/j.pacfin.2013.08.004

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