Dividend payouts, cash-flow uncertainty and the role of institutions
Author ORCID Identifier
Wenlian Gao: https://orcid.org/0000-0003-0795-9890
Publication Title
Journal of Business Finance and Accounting
ISSN
0306686X
E-ISSN
14685957
Document Type
Article
Abstract
This study examines the impact of cash-flow uncertainty on corporate dividend payouts and how this impact is shaped by country-level institutional environments. Employing a large sample of 41,157 firms in 49 economies from 1996 to 2018, we document that cash-flow uncertainty has a negative impact on dividend payouts and that this negative relation is more pronounced in economies with stronger institutions. Our results indicate that strong institutions could facilitate information disclosure, reduce government interventions and promote corporate financing opportunities, thus making firms less subject to agency costs and less motivated to disguise their cash-flow risk.
First Page
1356
Last Page
1390
Publication Date
7-1-2022
DOI
10.1111/jbfa.12595
Keywords
agency costs, cash-flow uncertainty, dividend payouts, institutions
Recommended Citation
An, Z., Gao, W., Li, D., & Ye, D. (2022). Dividend payouts, cash-flow uncertainty and the role of institutions. Journal of Business Finance & Accounting, 49, 1356– 1390. https://doi.org/10.1111/jbfa.12595
Original Citation
An, Z., Gao, W., Li, D., & Ye, D. (2022). Dividend payouts, cash-flow uncertainty and the role of institutions. Journal of Business Finance & Accounting, 49, 1356– 1390. https://doi.org/10.1111/jbfa.12595
Department
Department of Finance
