Dividend Policy and the COVID-19 Crisis

Mazur, Mieszko; Dang, Man; Vo, Thi Thuy Anh

doi:10.2139/ssrn.3723790

Cited by 18 publications

(14 citation statements)

References 34 publications

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“…The result deviates from the general assumption in the dividend literature that companies are generally conservative on dividend policies and may seldom cut or omit dividend payout due to the negative signal it may send to the market(Baker & Wurgler, 2016;Hardy, 2021). It also departs from a recent observation byMazur et al (2020) that most S&P 1500 firms in the US either maintain or increase dividends during the COVID-19 period. The COVID-19 pandemic has shown that managers may deviate from conservative dividend policies in highly uncertain times.The finding is consistent withNtantamis and Zhou (2022), who reported a significant dividend payment cut among G-7 countries during the COVID-19 pandemic.…”

contrasting

confidence: 91%

“…Recent studies by Ali (2022) and Ntantamis and Zhou (2022) found that majority of firms listed in the G‐12 and G‐7 countries respectively cut or omitted dividends during the COVID‐19 pandemic as a way of building resilience towards the uncertainties of the crises. An exception, however, is a study by Mazur et al (2020) who reported that most S&P 1500 firms in the US either maintained or increased dividends during the COVID‐19 period. Considering the impact of the pandemic on South Africa and its economy we posit a negative impact of the pandemic on dividend payout.…”

Section: Theoretical Framework and Development Of Hypothesismentioning

confidence: 99%

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Corporate social responsibility and dividend payout policy in extraordinary time: Empirical study of South Africa

Buertey

Ramsawak

Dziwornu

et al. 2023

Corp Soc Responsibility Env

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Corporate social responsibility (CSR) is a strategic tool that firms use to gain competitive advantage and enhance profitability in the long run, yet its effect on dividend payout in extraordinary times is limited. Grounded in stakeholder and dual responsibility theories, this study examines the effect of CSR on the relationship between COVID‐19 and dividend payout. Data from the period 2015–2021 were obtained from 114 non‐financial listed firms on the Johannesburg Stock Exchange, South Africa, and analyzed by multivariate and logit regression techniques. COVID‐19 has a negative effect on the amount and likelihood of dividend payment, while CSR performance has a positive effect on the likelihood and amount of dividend payment. However, the result of the negative effect of COVID‐19 on dividend payment does not differ between high and low CSR performing firms. Conversely, the impact of COVID‐19 and CSR on dividend payment differ between high and low financial constraint firms. Shareholders should learn to manage their expectations of dividends payment during times of crisis like COVID‐19, as firms tend to focus more on addressing the needs of stakeholders through CSR initiatives, which will enhance profit in the long term, rather than paying out dividend to shareholders.

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contrasting

confidence: 91%

Section: Theoretical Framework and Development Of Hypothesismentioning

confidence: 99%

Corporate social responsibility and dividend payout policy in extraordinary time: Empirical study of South Africa

Buertey

Ramsawak

Dziwornu

et al. 2023

Corp Soc Responsibility Env

View full text Add to dashboard Cite

show abstract

“…Several studies focus on the effect of Covid-19 on financial markets, such as the impact on stock market returns and volatility (Al-Awadhi et al, 2020;Albulescu, 2020;Ali et al, 2020;Ashraf, 2020bAshraf, , 2020cBahrini & Filfilan, 2020;Contessi & Pierangelo, 2020;Gu et al, 2020;Harjoto et al, 2020;Kartal, Kılıç-Depren, & Depren, 2020;Mazur, Dang, & Vega, 2020;Rababah et al, 2020;Sergi et al, 2021;Thorbecke, 2020;Topcu & Gulal, 2020), trade volume (Chiah & Zhong, 2020;Harjoto et al, 2020), stock repurchases (Pirgaip, 2021), government responses or interventions (Ashraf, 2020a;Chen et al, 2020;Zaremba et al, 2020;Zaremba et al, 2021), contagion effect (Okorie & Lin, 2020), market illiquidity (Baig et al, 2020), tourism and leisure sectors (Karabulut et al, 2020;Ghosh, 2020;Kaczmarek et al, 2021), herding behavior (Chang, McAleer, & Wang, 2020;Espinosa-Méndez & Arias, 2020), cryptocurrencies (Conlon & McGee, 2020Corbet, Larkin, & Lucey, 2020;, mutual funds (Mirza et al, 2020;Yarovaya et al, 2021), dividends (Krieger, Mauck, & Pruitt, 2020;Mazur, Dang, & Vo, 2020), uncertainty (Jeris & Nath, 2020), housing prices (Qian, Qiu, & Zhang, 2021) and oil prices (Corbe...…”

Section: Introductionmentioning

confidence: 99%

The Effect of Pandemic News on Stock Market Returns During the Covid-19 Crash: Evidence from International Markets

Tan¹

2021

connectist

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This study investigates the effect of pandemic-related news on stock market returns in international markets using the quantile regression method. The media hype index, fake news index, country sentiment index, infodemic index, and media coverage index provided by the RavenPack data platform are used for the analysis. In this research, 2,996 observations from 80 countries, consisting of daily data from January 22, 2020, to April 17, 2020, were used. The results show that the impact of Covid-19-related news on market returns varies among the quantiles of the stock market; in other words, there is an asymmetric dependency between the news and financial markets. With the increase in coverage about the pandemic in the media, the negative impact on market returns exhibits a decreasing trend from low quantiles to high quantiles. More intense use of effective communication channels is required to alleviate the financial crash caused by Covid-19. To capture the effect of the news on financial markets, this analysis also categorized countries according to the Morgan Stanley Classification Index (MSCI, n.d.), such as by developed, emerging, standalone, and frontier markets and by geographical location, including Europe, Africa, North and South America, Asia, and the Middle East. The results are consistent with the previous findings and the dependency between the news and financial markets remains asymmetric.

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“…An important aspect of the companies' financial policy is the dividend payment policy. Examining the dividend policy of the companies included in the S&P1500 index basket, Mazur et al (2020) conclude that over 80% of the observed companies maintained or even increased the number of dividends paid, regardless of the deterioration caused by the pandemic. On the other hand, Pettenuzzo et al (2021) observed a significantly larger sample of American companies 1 , and found a significantly larger sample of American companies that withdrew from the payment of dividends and strengthened their cash positions, often seeking external sources of financing.…”

Section: Literature Reviewmentioning

confidence: 96%

Corporate Financial Policy as a Factor of Corporate Sustainability and Health during COVID-19 Pandemic Period

Šabotić

Lekpek

2022

Manag: J. Sustain. Bus. Manag. Solut. Emerg. Econ.

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Research Question: This paper analyses whether a relationship exists between the financial policy of the companies, embodied in the structure of assets and liabilities, and their financial health during the COVID-19 pandemic. Motivation: The paper aims to consider the impact of changes in the value of individual items of the balance sheet of selected companies on the movement of profitability, liquidity, and market value of companies, as measures of the companies’ financial health. Idea: The core idea of this paper was to empirically evaluate the financial health of domestic companies, where the financial policy that the selected companies implemented was taken as a factor of financial health. The financial policy was viewed through the structure of assets and financing of the chosen companies, while financial resilience observation was based on indicators of profitability, liquidity, and market value of the companies. Data: Secondary data from the reference database (Index of the Belgrade Stock Exchange) during the period 2016-2020, which includes 30 companies from the real sector, serve as the relevant basis for the realization of the research within the adequately set area of the research. Tools will be used to study the relationship, i.e., connectivity of selected research variables based on regression analysis in the frame of parametric quantitative procedures. The financial policy was viewed through the structure of assets and financing of the chosen companies, based on their balance sheets, while financial resilience observation was based on indicators of profitability, liquidity, and market value of the companies, which were used as dependent variables in the research. Findings: The point that changes in a relatively small number of the balance sheet items of selected companies influenced the movement of the mentioned financial health indicators during the COVID-19 pandemic. Contribution: Presented research results are significant and representative for future corporate practice. The key contribution of this research is the identification of assets’ elements with a critical impact on companies’ financial health.

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Dividend Policy and the COVID-19 Crisis

Cited by 18 publications

References 34 publications

Corporate social responsibility and dividend payout policy in extraordinary time: Empirical study of South Africa

Corporate social responsibility and dividend payout policy in extraordinary time: Empirical study of South Africa

The Effect of Pandemic News on Stock Market Returns During the Covid-19 Crash: Evidence from International Markets

Corporate Financial Policy as a Factor of Corporate Sustainability and Health during COVID-19 Pandemic Period

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