Abstract
We investigated the effect of uncertainty associated with infectious diseases on corporate dividend policy. We used a unique text-based measure of infectious diseases that includes not only the Covid-19, but also other important diseases, such as SARs, MERs, and Ebola. Based on a sample of 287,151 firm-year observations across four decades (from 1985 to 2021), our results show that a higher level of uncertainty associated with infectious diseases significantly reduce dividends. Interestingly, we also found that having more independent directors on the board mitigates the negative effect of uncertainty associated with infectious diseases on dividends which implies that the reduction in dividends was partly driven by agency conflicts. We performed several robustness checks which confirm that our findings are unlikely to be affected by endogeneity issues.
Funder
National Research Council of Thailand
Sasin School of Management's major research grant
Publisher
Public Library of Science (PLoS)
Reference94 articles.
1. Payout Policy in the 21st Century.;A Brav;Journal of Financial Economics,2005
2. Payout Policy and Cash-flow Uncertainty.;J Chay;Journal of Financial Economics,2009
3. Dividend Policy: International evidence;Tran Q. Corruption;The Quarterly Review of Economics and Finance,2020
4. Culture, Corporate, Governance, and;S Bae;Dividend Policy.Journal of Financial Research,2012
5. Corporate Governance and Firm Value: Evidence from the Korean Financial Crisis;J Baek;Journal of Financial Economics,2004
Cited by
2 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献