SMEs and dividend payout policy in case of poor legal environment

Greta Falavigna and Roberto Ippoliti

Journal of Small Business Management, 2024, vol. 62, issue 3, 1498-1530

Abstract: This article investigates the dividend informational content hypothesis, showing how managers react to a poor legal environment through positive and credible messages to investors. We analyze private and public limited companies between 2015 and 2019, exploring the relation between their dividend payout policies and the courts’ ability to enforce creditor rights in case of insolvency. Based on our results, we can observe a positive relation between judicial delay and the SMEs’ decisions on dividend payouts, meaning that as the inefficiency of courts increases, small businesses are ever more likely to pay out dividends so that they can send a positive message to the local capital market. On the other hand, our results cannot confirm the same relation for public limited companies, which operate n the global capital market, highlighting the key role of local ties.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00472778.2022.2144634 (text/html)
Access to full text is restricted to subscribers.

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:taf:ujbmxx:v:62:y:2024:i:3:p:1498-1530

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ujbm20

DOI: 10.1080/00472778.2022.2144634

Access Statistics for this article

Journal of Small Business Management is currently edited by Eric Liguori

More articles in Journal of Small Business Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().