The Impact of Board Political Connection & Information Disclosure Quality on Firms’ Dividend Payout Policy
Because of the important role of dividend payout policy in managers decision makings, the perception and determination the effecting factors on dividend payout policy not only provide an explicit description about the firms’ ability to distribute cash, but also it can provide the possibility of estimation the future behavior of firms. Some studies showed that firms’ dividend payout policy affected by information disclosure and connection to center of political power. This paper empirically analyzed the impact of board political connection & information disclosure quality on firms’ dividend payout policy. Research Hypotheses tested by using multivariate regression models based on panel data with fixed effect and generalized least squares method. Research samples include 204 firms listed in Tehran Securities & Exchange during March 2012 till March 2019. According to the research findings, those firms with board political connected paid more dividends. This result is accordance with signaling hypothesis. Also, those firms with high quality of information disclosure paid more dividends. This result is accordance with outcome hypothesis. In Addition, high quality of information disclosure in political connected firms leads to increase the dividend payout. Other findings indicated that board’s expertise, leadership and independence had no impact on dividend payout. Agency cost, long term debt, loss, revenue volatility, size and tangibility had negative impact, but age, managerial ownership and tax avoidance had positive impact on dividend payout. So, these findings provide specified approach to determine the effecting factors related to dividend payout by focusing on theoretical & empirical perspectives.
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