Government Ownership and Dividend Policy: Evidence from Newly Privatized Firms

Journal Article

• نوع عمل المنشور: Original article
• رابط المنشور على الويب: Journal of Business Finance and Accounting
• الصفحات: In Press

مستخلص المنشور

In this paper we examine the relationship between government ownership and dividend policy. Using a multinational sample of newly privatized firms from 43 countries, we find strong and robust evidence indicating that dividend payout is negatively related to government ownership, consistent with the predictions of the agency theory. We also find that country-level corporate governance affects the relationship between government ownership and dividend policy. Specifically, the adverse effects of government ownership on dividend policy are more pronounced in countries with weak law and order and a lower level of checks and balances. Our results are important, as they show that government ownership, as well as the institutional environment, does in fact affect the critical corporate policies, such as dividend policy, of newly privatized firms.