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    Creditor rights and the outcome model of dividends


    Byrne, Julie and O'Connor, Thomas G. (2012) Creditor rights and the outcome model of dividends. The Quarterly Review of Economics and Finance, 52 (2). pp. 227-242. ISSN 1062-9769

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    Abstract

    Using a sample of 22,374 firms from 35 countries, we examine the role of creditor rights, shareholder rights, and corporate governance in determining corporate dividend policy. We find that, while all three variables play a significant role in determining both the likelihood and the dividend amount, the effect of country-level creditor rights dominate. In subsequent analysis, we show that the outcome model is most effective in countries with strong creditor rights. When creditor rights are weak, creditors demand, and firms consent to lower dividends. These findings show that creditors, and not shareholders, exert the greatest influence over corporate dividend policy

    Item Type: Article
    Keywords: Dividend policy; Creditor rights; Shareholder rights; Corporate governance;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 5721
    Identification Number: https://doi.org/10.1016/j.qref.2012.04.002
    Depositing User: Thomas G. O'Connor
    Date Deposited: 22 Jan 2015 17:40
    Journal or Publication Title: The Quarterly Review of Economics and Finance
    Publisher: Bureau of Economic and Business Research, University of Illinois at Urbana-Champaign
    Refereed: Yes
    URI:

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