A1708
Title: A global look into stock indices for dividend payout, corporate cash, and ESG issues
Authors: Kei-Ichiro Inaba - Hitotsubashi University Business School ICS (Japan) [presenting]
Abstract: By conducting country-level panel-data regressions to investigate the determinants of divided payments in 18 countries' representative stock market indices over the period 2008-2020, we analyze the trade-off in the distribution of net profits between paying dividends and retaining the rest in relation to environment (E), social (S), and governance (G) issues. Country-specific E, S, and G factors are formulated to work as the moderator variables for dividend payments. We find that dividend payments at a given year were positively associated with annual net profits, cash holdings at the beginning of the year, and leverage at the end of the year. The positive association with leverage decreased its impact as the dependency of national financial systems on banks increased. The impact of the positive association with the profits was weakened by a composite indicator of country-specific E attainments and an indicator for anti-corruption related to the agency costs of equity. Higher E attainments and less corruption were associated with fewer dividend payments in relation to the profits. These associations were the most impactful on dividend payments amongst the regressors. A G factor of protecting minority shareholders helped them become less impactful, resulting in more dividend payments.
