The effect of board independence on dividend payouts: A quasi-natural experiment

被引:6
|
作者
Chintrakarn, Pandej [1 ]
Jiraporn, Pornsit [2 ,6 ]
Treepongkaruna, Sirimon [3 ,4 ,5 ]
Lee, Sang Mook [2 ,6 ]
机构
[1] Mahidol Univ Int Coll, Nakhon Prathom, Nakhon Prathom, Thailand
[2] Penn State Univ, Sch Grad Profess Studies, Malvern, PA 19355 USA
[3] Chulalongkorn Univ, Sasin Sch Management, Bangkok, Thailand
[4] Univ Western Australia, UWA Business Sch, Perth, Australia
[5] 35 Stirling Highway, Crawley, WA 6009, Australia
[6] 30 E Swedesford Rd, Malvern, PA 19335 USA
来源
NORTH AMERICAN JOURNAL OF ECONOMICS AND FINANCE | 2022年 / 63卷
关键词
Dividends; Board independence; Independent directors; Corporate governance; Payout policy; SARBANES-OXLEY-ACT; CORPORATE GOVERNANCE QUALITY; CEO COMPENSATION; AGENCY COSTS; POLICY; CASH; OWNERSHIP; DIRECTORS; CONSEQUENCES; PROPENSITY;
D O I
10.1016/j.najef.2022.101836
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Motivated by agency theory, we investigate the effect of board independence on dividend policy. We exploit as a quasi-natural experiment the passage of the Sarbanes-Oxley Act and the associ-ated exchange listing requirement, mandating firms to have a majority of independent directors. Our difference-in-difference estimates show that firms forced to raise board independence are significantly more likely to pay dividends than firms not required to change board independence. Our results are consistent with the notion that stronger board independence forces managers to disgorge more cash to shareholders, thereby reducing what is left for possible expropriation by opportunistic managers. Based on an exogenous regulatory shock, our results are more likely to show a casual effect, rather than merely an association.
引用
收藏
页数:22
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