The moderating effect of dividend policy on the relationship between the corporate risk disclosure and firm value: evidence from Egypt

Abstract

AbstractThis paper investigates the effects of corporate risk disclosure (CRD) and dividend policy (DP) on firm value (FV) for non-financial companies listed on the Egyptian Stock Exchange. Using a sample of 45 non-financial firms from 2016 to 2022, which yielded 315 firm-year observations, we find a significant positive relationship between CRD and FV, supporting signaling theory. DP also exhibits a positive association with FV. Additionally, DP positively moderates the CRD-FV relationship, indicating a complementary effect where dividends enhance the CRD's positive signal. The results are robust across fixed effects, random effects, and pooled OLS models. This study makes key empirical and theoretical contributions by validating the hypothesized relationships in the Egyptian context. It also provides managerial insights into value drivers for public firms in developing economies. Further research can corroborate the findings in other emerging markets. Overall, this paper enhances understanding of the linkages between risk disclosure, dividend policy, and firm valuation outcomes.