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Do corporate governance mechanisms affect cash dividends? An empirical investigation of UK firms

Al-Najjar, Basil and Belghitar, Yacine (2014) Do corporate governance mechanisms affect cash dividends? An empirical investigation of UK firms. International Review of Applied Economics, 28 (4). pp. 524-538. ISSN 0269-2171

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The study examines whether corporate governance mechanisms and the compliance with good governance practice are related to cash dividends. In particular, the study assesses the effect of institutional ownership and board structure on the decision to pay cash dividends. A study on UK firms is interesting because firms are expected to voluntarily structure governance mechanisms based on their own needs. We find that institutional owners positively affect cash dividend payments, suggesting that UK institutions are effective in forcing firms to disgorge cash. There is limited evidence that independent directors affect the cash dividends. The results also show that firm specifics affect the cash dividends, namely, business risk, firm size, and leverage ratio. The results are consistent across several robustness checks.

Item Type: Article
Uncontrolled Keywords: audit committee, audit meetings, independent auditors, non-executive directors, institutional ownership, cash dividends
Subjects: H Social Sciences > HG Finance
Schools: Huddersfield Business School
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Depositing User: Basil Al-Najjar
Date Deposited: 14 Aug 2017 08:37
Last Modified: 28 Aug 2021 12:19


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