Agency Conflicts and Corporate Payout Policies: A Global Study

Brown, Philip S., Bartram, Sohnke, How, Janice, & Verhoeven, Peter (2009) Agency Conflicts and Corporate Payout Policies: A Global Study. In 2009 FMA Annual Meetinbg, 21-24 October 2009, United States of America, Nevada, Reno.


We investigate the roles of finn and country level agency conflicts in determining corporate payout policics. Based on a large sample of 29,610 firms in 42 countries from 2001 to 2006, we show there is a form of "pecking order" in investors' ability to extract cash (whether as dividends only or share repurchases) from firms. Although investors are able to use their legal powers to extract cash from firms in high protection countries, their ability to do so can be substantially hindered when agency costs at the firm level are high. In poor protection countries, investors seem to take whatever cash they can get, even though the amount may be small, and with scant regard for investment opportunities and firm level agency conflicts. Finally, compared to repurchases, we find dividends are more likely to be the sole method of payout in high protection countries and in non insider-dominated firms.

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ID Code: 32410
Item Type: Conference Paper
Refereed: Yes
Keywords: Dividends, Share Repurchases, Agency Costs, Payout Choice
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200) > Agricultural Economics (140201)
Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > ECONOMETRICS (140300) > Economic Models and Forecasting (140303)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Deposited On: 21 Jan 2015 23:49
Last Modified: 21 Jan 2015 23:49

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