دانلود رایگان مقاله انگلیسی خبرگی مالی هیئت مدیره و رفتار سود سهام شرکت ها: بازارهای سهام در حال ظهور - امرالد 2018

Abstract

Purpose – Numerous researchers have developed theories and studies to uncover the issues pertinent to dividend policy dynamics, but it is still one of the unresolved problems of finance. The purpose of this paper is to focus on a new dimension, i.e., financial expertise on the corporate board for explaining the dividend policy dynamics in the emerging equity markets of China and Pakistan. Design/methodology/approach – The study employs static (fixed effect (FE) and random effect (RE)) and dynamic models – two-step generalized method of moments (GMM) estimation techniques by Arellano and Bond (1991) and Arellano and Bover (1995) – during the timespan from 2009 to 2014. Further, this study re-estimated FE, RE and GMM two-step estimation techniques by excluding the non-dividend-paying companies, and also employed instrumental variable regressing by using two instrumental variables – industry average financial expertise of the board and board size – as proxies for board financial expertise to control the possible endogeneity. Findings – The study reveals that Chinese firms having more financial expertise on the board do not take dividends as a control mechanism (substitution hypothesis), while Pakistani firms support the compliment hypothesis and use dividends as a control mechanism to mitigate agency conflict to protect shareholders’ interests and keep additional funds from the manager’s opportunism. Further robustness models also confirm the presence of a significant association between dividend policy and board financial expertise in both equity markets. Originality/value – This study introduces the financial expertise on a board as a determinant of dividend policy. To the best of the authors’ knowledge, no previous studies have focused on board-level financial expertise as a contributing factor toward dividend policy.

6. Conclusion

Many researchers have proposed theories and studies to explore the dividend policy behavior of firms within different streams. Previous studies have focused on tax preference theories, signaling and agency cost hypotheses to explore the dividend behavior, but dividend policy is still a puzzle. The empirical literature also identifies a variety of firm-specific fundamentals, corporate governance factors, industry-specific and country-specific patterns to explain the firms’ dividend policy behaviors. However, dividend policy is still considered an unresolved finance problem (Brealey and Myers, 2005). Many questions still need to be answered since researchers have reported conflicting results. This study focuses on a new dimension, i.e., financial expertise on the board, for explaining the dividend policy dynamics in emerging markets.

We use the static (FE and RE) and dynamic models – two-step GMM estimation techniques by Arellano and Bond (1991) and Arellano and Bover (1995) – to investigate the relationship between board financial expertise and dividend policy. These results support that Pakistani firms are taking financial expertise as proxy to corporate governance and support the compliment hypothesis, while Chinese firms back the substitution hypothesis by paying less dividends. Further robustness models also confirm the presence of a significant association between dividend policy and board financial expertise in both equity markets.