The effect of business strategy on the linear and nonlinear relation between corporate social responsibility with the amount and stability of the company's dividend

This study investigates the effect of business strategy on the relation between social responsibility with the amount and stability of dividends. To measure the strategy, the modified Yuan et al. (2018) model is used with five dimensions. Corporate social responsibility (CSR) is determined by modified indicators of Yuan et al. (2018), and Bahar-Moghaddam et al. (2013). The variables of the amount and stability of dividends are calculated based on Benlemlih (2018). Samples are selected through regular screening on companies listed on Tehran Stock Exchange from 2013 to 2017 and multivariate regression models with fixed effects is used to test the hypotheses. Findings show that (1) despite the strong positive linear relation between CSR and (the amount and stability of) dividends, no nonlinear relation is found between them, so this approves corporate social responsibility thoughts. (2) The business strategy has a strong negative linear relation with the (amount and stability of) dividends, i.e., firms with aggressive (defensive) business strategy distribute lower (higher) dividends. (3) Interactive effect (strategy and CSR) has a strong negative linear relation with (the amount and stability of) dividends, but there is no significant nonlinear relation between them, therefor, the business strategy has a stronger effect on the amount and stability of firms’ dividends than CSR.