The power of ESG in shaping dividend policy: Illuminating the role of financial sustainability in an emerging market

Abdulateif A Almulhim, Abdullah A Aljughaiman, Thamir Al Barrak, Kaouther Chebbi and Nagwa Amin

PLOS ONE, 2024, vol. 19, issue 12, 1-23

Abstract: This study investigates the impact of environmental, social, and governance (ESG) scores on dividend policy, while taking into account the moderating effect of financial sustainability. It examines data from companies listed on the Saudi Exchange, during the period spanning the years from 2013 to 2022. According to the findings of panel regression analysis, there is a strong positive correlation between ESG performance and dividend payments. In essence, businesses that exhibit strong ESG practices continuously maintain dividend payments as a way of demonstrating their dedication to both stakeholders and shareholders. Furthermore, financial sustainability exerts an enhancing influence on the ESG–dividend relationship, indicating that the positive effect of ESG on dividend yields is significant in financially sustainable companies compared to their peers. It is noteworthy that these conclusions hold up well even when put through sensitivity studies using different estimating methods. The implications of these results extend to a broad spectrum of stakeholders, including investors, management, analysts, and policymakers. They provide valuable insights for companies and markets seeking to expand their ESG initiatives.

Date: 2024
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0312290 (text/html)
https://journals.plos.org/plosone/article/file?id= ... 12290&type=printable (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0312290

DOI: 10.1371/journal.pone.0312290

Access Statistics for this article

More articles in PLOS ONE from Public Library of Science
Bibliographic data for series maintained by plosone ().