Flavin, Thomas and Goyal, Abhinav and O'Connor, Thomas (2021) Corporate governance, life cycle, and payout precommitment: An emerging market study. Journal of Financial Research, 44 (1). pp. 179-209. ISSN 0270-2592

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Abstract

We analyze the role of firm‐level corporate governancein determining the precommitment payout policy ofemerging market firms and investigate whether there is aprecommitment life‐cycle effect. Unlike previous studiesof U.S. firms, we find evidence of precommitment onlyamong relatively well‐governed firms, which combinegood governance with large dividend payouts to share-holders and large debt‐related repayments to creditors.We also document a strong precommitment life‐cycleeffect. Firms in the growth and mature stages of their lifecycle tend to use both debt and dividends to precommit toinvestors, with an increasing proportion of dividends intotal payout measures. Our results are robust to an arrayof control variables, alternate payout proxies, marketsetting, and firm‐level corporate governance, and itaddresses potential endogeneity concerns in the sample.

Item Type:	Article
Keywords:	Corporate governance; life cycle; payout precommitment; emerging market study;
Academic Unit:	Faculty of Social Sciences > School of Business
Item ID:	17214
Identification Number:	https://doi.org/10.1111/jfir.12238
Depositing User:	Thomas Flavin
Date Deposited:	23 May 2023 10:25
Journal or Publication Title:	Journal of Financial Research
Publisher:	Wiley
Refereed:	Yes
URI:	Publisher
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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