Corporate dividend policy, minority shareholders right and equity value of firm: Evidence from Singapore

Ganguli, Santanu K.; Dawar, Varun; Arrawatia, Rakesh

doi:10.1002/pa.2039

Cited by 5 publications

(7 citation statements)

References 28 publications

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“…Moreover, Farrukh et al (2017) reported that dividend payouts are positively associated with Pakistanian corporations' value. More recently, similar evidence was found by Rajverma et al (2019), Ganguli et al (2020), and Dang et al (2020) in the Indian, Singapore and Vietnam contexts, respectively.…”

Section: Corporate Payout Policy and Firm Valuesupporting

confidence: 76%

The underlying mechanisms of the relationships between corporate financial policies and firm value: flexibility and agency theory perspectives

El-Ansary

Hamza

2022

APJBA

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PurposeThis paper aims to discover the underlying mechanisms by which corporate financial policies, cash holdings, capital structure and dividend payouts, transmit their effects on firm value in the “Middle East and North Africa” (MENA) emerging markets.Design/methodology/approachThe authors employ a novel integration of path modelling with parallel multiple mediation analysis to empirically test the hypothesised indirect effects through the mechanisms represented by the value of financial flexibility (VOFF) and agency costs.FindingsThe authors do not find any evidence of the association between cash holdings, dividend payouts, and firm value when the mechanisms through the VOFF and agency costs are considered. While these two forces, i.e. the VOFF and agency costs, have balanced mediation effects on the relationship between cash holdings and firm value, they represent equivalent and complementary mechanisms by which dividend payouts transmit their positive impact on firm value. Moreover, we document a significant negative partial mediation effect of agency costs on the relationship between leverage and firm value; however, we do not find any evidence supporting the mediation effect of the VOFF on such a relationship.Originality/valueThis paper sheds new light on the forces that govern the nature of the relationships between corporate financial policies and firm value.

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Section: Corporate Payout Policy and Firm Valuesupporting

confidence: 76%

The underlying mechanisms of the relationships between corporate financial policies and firm value: flexibility and agency theory perspectives

El-Ansary

Hamza

2022

APJBA

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“…1. Krüger (2015). Panchal (2018) and Ganguli et al (2020). The advantage of assessing the effect of dividend policy on sales, TFP and stock returns will be discussed at the end of the next section.…”

Section: Notesmentioning

confidence: 98%

“…In fact, the effect of paying dividends on the firm indicators has not been assigned to an extensive research. Most of the studies mainly study this effect on firm value, earnings as well as profitability (Panchal, 2018; Ganguli et al , 2020). This paper suggests novel proxies to measure the sustainability of the firm as well as the wealth of its shareholders.…”

Section: Literature Reviewmentioning

confidence: 99%

“…First, dividends have important benefits on the agency costs of free cash flow that are essential for the firms, especially if the firms are operating in the emerging markets (Dittmar et al , 2003; Benlemlih, 2019). Second, the dividends represent a sign for the market that the firm has, at least, a steady financial strength and profitability (Baker and Wurgler, 2011; Ganguli et al , 2020).…”

Section: Introductionmentioning

confidence: 99%

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Assessing the impact of dividend policy on the sustainability of distressed firms

Sami

Abdallah

2021

JM2

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Purpose The paper uses firm level data for the top listed firms in New York exchange stock over the period 2000–2017. The analysis is mainly based on 237 firms that already experienced losses at the end of the fiscal year. The study aims to use the properties of the dynamic panel data, specifically the methodology proposed by Arenllo and Bond (1991), to fulfill the objectives of the paper. Design/methodology/approach This paper focuses on the dividend policy management of the firms when they experience a loss at the end of the fiscal year. The objective is to examine how such a policy management affects the sustainability of the firm (measured by the future sales and total factor productivity[TFP]) and the wealth of its shareholders (measured by the Stock Returns). Findings The results show that the distressed firms that distribute dividends at the end of the loss period are able to maintain sustainability and to reach more favorable wealth situation of their shareholders relative to the firms who abstain to pay; the dividend policy during periods of loss is still able to send positive signals about the firm in the market; and the dividend policy can be considered as a predictive indicator for a sustainable firm whose shareholders can also predict their capital gains. Originality/value Agreed upon the literature that the firms during the period of crisis are likely to change their dividend policy, this study offers robust evidence that the dividend policy of distressed firms affects their sustainability (measured by sales and TFP) and the wealth status of their shareholders (measured by the Stock Returns).

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“…Specifically, intense competition can mitigate the principle-principle agency problems and is associated with larger dividend payouts and higher likelihood dividend payouts. Furthermore, Ganguli et al (2020) examine the relationship between corporate governance and dividend policy from the perspective of minority shareholders rights based on a sample of FTSE ST companies of Singapore. The authors find that in a civil law country with strong investor protection and good corporate governance code, minority shareholders can force firm managers to disgorge cash through dividends, which in turn lead to higher equity values of firms.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Does Corporate Governance Affect the Critical Corporate Policies Such as Dividend Policy?

Lin

2020

IJEFI

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This study examines the influence of corporate governance on dividend policy based on a sample of Canadian firms listed on the S&P/TSX composite index during 2009-2012. The results show that firms with better governance quality, measured by the governance index provided by The Globe and Mail, have larger payouts and have a higher propensity to pay dividends. In terms of four dimensions of corporate governance index, the shareholding and compensation index is the most important determinant of dividend payouts. Our results support the complementary role of corporate governance and dividend policy of the firms. The implication from this study is that managers and board of directors should make dividend payout decisions in a big picture of corporate governance.

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Corporate dividend policy, minority shareholders right and equity value of firm: Evidence from Singapore

Cited by 5 publications

References 28 publications

The underlying mechanisms of the relationships between corporate financial policies and firm value: flexibility and agency theory perspectives

The underlying mechanisms of the relationships between corporate financial policies and firm value: flexibility and agency theory perspectives

Assessing the impact of dividend policy on the sustainability of distressed firms

Does Corporate Governance Affect the Critical Corporate Policies Such as Dividend Policy?

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