Abstract

We present robust international evidence that managerial social capital is a significant determinant of dividend policy worldwide. Our analysis reveals that social capital mitigates information asymmetry and financial constraints, thereby resulting in increased dividend payouts. The effect is particularly pronounced for firms anticipating high cash retention costs. These findings are consistent with the pecking-order perspective of corporate payouts. Moreover, we identify a significant moderating role of shareholder legal protection and national cultural characteristics. Our results remain robust across alternative model specifications and tests for endogeneity.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.