 Can liquidity explain dividends?Xuan Vinh Vo Cogent Business & Management, 2022, vol. 9, issue 1, 2018906 Abstract: Vietnam is an interesting case to study firm behavior because it is an example of a successful transitional economy. In the last few years, the government is building a supportive environment to promote business activities. Therefore, it is crucial to investigate whether corporate managers utilize dividend payout policy as a corporate financial management tool to address information asymmetries in such an environment. However, in the context of emerging markets, this topic is still under-explored even though firms in emerging markets are of lower disclosure quality. This paper investigates how corporate dividend decision is associated with liquidity, a measure of information asymmetries using a data sample of listed firms in Vietnam, an emerging market. Specifically, we utilize a dataset of firms listed on the Ho Chi Minh City stock exchange (HOSE) from 2007 to 2015. We find a negative relation between stock market liquidity and dividend payout in Vietnamese firms. The finding confirms that corporate managers in Vietnam tend to compensate for less liquidity with more dividend payout. The paper also suggests that dividends could be a substitute for stock liquidity. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:oabmxx:v:9:y:2022:i:1:p:2018906 Ordering information: This journal article can be ordered from DOI: 10.1080/23311975.2021.2018906 Access Statistics for this article Cogent Business & Management is currently edited by Len Tiu Wright and Tahir Nisar More articles in Cogent Business & Management from Taylor & Francis Journals |
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