Political sentiment and corporate payouts

A. Hossain, R. Benkraiem () and C. Krishnamurti
Additional contact information
R. Benkraiem: Audencia Business School

Post-Print from HAL

Abstract: We provide empirical evidence of the impact of firm-level political sentiment on dividend policy. Using a sample composed of over 34,000 firm years, we find that a high level of political sentiment is associated with a lower level of dividend payout. The evidence is robust and survives several tests that address potential endogeneity. Our results suggest that managers consider investors' political sentiment in setting dividend policy. When political sentiment is negative, they pay higher dividends to assuage investors' concerns regarding future prospects. Our results are also consistent with the view that firms pay higher dividends to address the agency cost issue that arises from the free cash flow problem during periods of negative political sentiment.

Keywords: Dividend policy; Political sentiment; Behavioral corporate finance (search for similar items in EconPapers)
Date: 2025-06
Note: View the original document on HAL open archive server: https://hal.science/hal-05143195v1
References: Add references at CitEc
Citations:

Published in International Review of Financial Analysis, 2025, 102 (June), pp.104078. ⟨10.1016/j.irfa.2025.104078⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-05143195

DOI: 10.1016/j.irfa.2025.104078

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().