Article | Open Access | Published: 11 June 2016
Investor Confidence, Corporate Governance, Stock Liquidity and Dividend Policy
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Abstract:
The objective of this study is to examine the impact of investor confidence, corporate governance, and stock liquidity on the dividend policy of firms listed on Pakistan stock exchanges from 2010-2015. The liquidity constraint enabled a superior association with the interests of the controlling shareholders, particularly outside investors, which make a significant enhancement in firms’ liquidity and governance. Our results indicate that dividends have a less significant impact on investor confidence after corporate governance. Our interpretation is that the improvement in corporate governance, especially the improvement in the alignment between growth opportunities and cash dividends, may take a longer time to emerge. These findings provide strong evidence that shifts in corporate governance and stock liquidity influence the dividend policy of a firm in a substantial manner. Another implication is that stock liquidity matters in firm dividend decision making, the liquidity deficiency is compensated by large cash dividends.
Keywords:
Dividend Policy, Corporate Governance, Investor Confidence and Stock Liquidity
Publisher:
ILMA UNIVERSITY
Published:
11 June 2016
Issue:
Issue 1 : Volume 12
E-ISSN:
2409-6520
P-ISSN:
2414-8393
This is an open access article distributed under the terms of the Creative Commons Attribution CC BY 4.0 license, which permits any use, distribution, and reproduction of the work without further permission provided the original author(s) and source are credited.