Payout policy and ESG: A European investigation

Antonio Salvi, Niccolò Nirino, Enrico Battisti and Igor Gianfrancesco

Research in International Business and Finance, 2024, vol. 68, issue C

Abstract: This paper investigates the relationship between Environmental, Social, and Governance (ESG) practices and firms’ payout policy (PP). The sample analyzed 3207 European firms from 2018 to 2022. The investigation reveals a positive and significant effect of ESG practices on firm’s PP, suggesting that companies prioritizing sustainability distribute higher dividends to shareholders. The results remain robust across different model specifications. This study offers valuable contributions to both theoretical and practical domains, enhancing the understanding of how sustainable concerns influence companies’ strategic decisions and highlighting the possible trade-off that managers face between investing in sustainability initiatives and distributing dividends.

Keywords: ESG; Dividend policy; Payout Policy; Sustainability (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:68:y:2024:i:c:s027553192300315x

DOI: 10.1016/j.ribaf.2023.102189

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