Announcement Effect of Cash Dividend in Presence of Firm Level Tax – An Agency Theory Based Explanation

2012 ◽  
Author(s):  
Santanu K. Ganguli ◽  
Manu Chaturvedi
Keyword(s):  
Agency Theory ◽  
Cash Dividend ◽  
Announcement Effect ◽  
Firm Level

Board Gender Diversity and Firm Performance

2019 ◽  
pp. 302-311
Author(s):  
Reem Khamis ◽  
Elisabetta Barone ◽  
Adel Sarea ◽  
Allam Mohammed Hamdan
Keyword(s):  
Firm Performance ◽  
Institutional Theory ◽  
Agency Theory ◽  
Resource Dependence ◽  
Gender Diversity ◽  
External Environment ◽  
Resource Dependence Theory ◽  
Firm Level ◽  
Exogenous Factors ◽  
Board Gender Diversity

This chapter aims at investigating board gender diversity and firm performance by integrating two theoretical backgrounds (agency theory and institutional theory). Board gender diversity has been investigated by using firm level theories such as agency theory and stewardship theory. Resource dependence theory, which links the board to the external environment of the firm, was also implemented in order to better understand how board gender diversity would affect firm performance. However, results were inconsistent. This study tries to integrate agency theory with institutional theory under the assumption that firms are affected by endogenous and exogenous factors that would eventually affect its outcomes such as performance.

The Announcement Effect of Cash Dividend Changes on Share Prices: An Empirical Analysis of China

2009 ◽  
Vol 42 (1) ◽  
pp. 62-85 ◽  
Author(s):  
Dar-Hsin Chen ◽  
Hsiang-Hsi Liu ◽  
Cheng-Ting Huang
Keyword(s):  
Empirical Analysis ◽  
Cash Dividend ◽  
Announcement Effect ◽  
Share Prices

scholarly journals DIRECTORS’ COMPENSATION. WHAT REALLY MATTERS?

2020 ◽  
Vol 21 (1) ◽  
pp. 180-199
Author(s):  
Isabel Acero ◽  
Nuria Alcalde
Keyword(s):  
Human Capital ◽  
Agency Theory ◽  
Human Capital Theory ◽  
Firm Level ◽  
Director Compensation ◽  
Capital Theory ◽  
Analytical Technique ◽  
Corporate Governance Mechanisms ◽  
Current Scenario ◽  
The Individual

In the current scenario of increasing social inequality, the debate over the compensation received by directors and executives of large listed companies, and its justification, has intensified. Drawing on Agency Theory and Human Capital Theory, a multilevel analytical technique is used in this paper to examine the influence of firm-level variables and director-level variables on the individual compensation of the members of the board. The results obtained for the continental European context (Spain in particular) partially support the Human Capital Theory. Nevertheless, there is no evidence supportive of Agency Theory, as corporate governance mechanisms do not contribute to moderate the compensation of directors and there is no relationship between corporate performance and the compensation of directors. The analyses by subsamples (categories of directors) reveal that non-executive director’s compensation seems to be set for a group of individuals as a whole, depending mainly on firm-level characteristics, whereas executive director compensation is more based on the unique characteristics that a particular executive brings to the board.

scholarly journals Corporate dividend decisions and dividend smoothing

2017 ◽  
Vol 13 (3) ◽  
pp. 304-331 ◽  
Author(s):  
Basil Al-Najjar ◽  
Erhan Kilincarslan
Keyword(s):  
Stock Exchange ◽  
Institutional Setting ◽  
Cash Dividend ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Dividend Smoothing ◽  
Financial Characteristics ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of regulations, reforms and legal environment on dividend policy in a different institutional setting. Particularly, it examines the firm-level cash dividend behaviour of publicly listed firms in Turkey in the post-2003 period, since there were major economic and structural reforms as well as significant regulatory changes of dividend payout rules imposed by the supervisory bodies. Design/methodology/approach The paper focuses on a recent large panel data set of 264 Istanbul Stock Exchange (ISE)-listed firms over a ten-year period 2003-2012. First, it employs a modified specification of Lintner’s (1956) partial adjustment model for analysis regarding target payout ratio and dividend smoothing. Second, it performs a logit model for analysis in identifying the link between financial characteristics and the likelihood of paying dividends. Findings The results show that ISE firms now follow the same determinants as suggested by Lintner. They, indeed, have long-term payout ratios and adjust their cash dividends by a moderate level of smoothing, and therefore adopt stable dividend policies (although less stable policies compared to their counterparts in the developed US market) as a signalling mechanism over the period 2003-2012. Moreover, the results also report that ownership structure concentration affects the target payout ratio and dividend smoothing in the Turkish market. In addition, the results further show that more profitable, more mature and larger sized ISE firms are more likely to pay cash dividends, whereas ISE firms with higher investment opportunities and more debt are less likely to distribute cash dividends in the post-2003 period. Originality/value To the best of authors’ knowledge, this paper is the first major research that examines the implications of reforms and regulations on cash dividend payments and dividend smoothing over time in Turkey during its market integration process in the post-2003 period.

scholarly journals An investigation of the performance of luxury firms in Europe from an agency theory perspective

2018 ◽  
Vol 15 ◽  
pp. 161-173 ◽  
Author(s):  
Domenico Campa
Keyword(s):  
Agency Theory ◽  
Ownership Structure ◽  
Regression Models ◽  
Company Performance ◽  
Firm Level ◽  
European Continent ◽  
Eu Member States ◽  
Large Panel ◽  
Agency Issues ◽  
Better Than

The luxury sector is one of the most significant segments of the economy. It is increasingly attracting the interest of investors given the high margins and growth that companies in this sector exhibit. What is the “secret” of this outstanding performance? Extant literature shows that firm-level strategies, i.e. marketing policies, supply-chain management, R&D investments, etc. are the keys to luxury company success. However, it neglected the investigation of ownership structure, in the context of the agency theory, as another determinant of company performance. This is an important gap since evidence indicates that ownership structure affects features that are crucial to the success of luxury firms. Accordingly, this paper uses a large panel dataset of luxury companies (1,153 unique firms and 8,253 firm-year observations) located in the European continent, OLS multivariate regression models with robust econometric features as well as a robustness test that controls for endogeneity and explores these firms from an agency theory perspective. It finds that luxury entities with higher ownership concentration perform better than the others. This relationship is stronger among non-EU member states and was not affected by the financial crisis. This investigation complements extant research on luxury companies showing that their governance does matter in explaining their success; thus it suggests to researchers of the luxury sector that the ownership structure of these entities cannot be ignored. The evidence reported in the paper helps owners and managers of luxury firms to detect potential agency issues and investors to spot features of highly profitable luxury firms.

Agent and stewardship behavior: How do they differ?

2017 ◽  
Vol 23 (5) ◽  
pp. 633-646 ◽  
Author(s):  
John A. Martin ◽  
Frank C. Butler
Keyword(s):  
Agency Theory ◽  
Chief Executive Officers ◽  
Chief Executive ◽  
Measurement Scale ◽  
Stewardship Theory ◽  
Firm Level ◽  
Executive Officers ◽  
Stewardship Behavior ◽  
Theory Lead

AbstractThe purpose of this study is examine how agency theory and stewardship theory lead to different firm-level outcomes on an array of different outcomes. Based on these differences, we argue for the development of an agent–steward measurement scale, which will help researchers classify chief executive officers (CEOs) along an agent–steward continuum. This, in turn, will spur research to predict and test CEO behaviors and firm-level outcomes. Agency theory suggests CEOs take advantage of their powerful positions to maximize their personal economic utility, whereas stewardship theory suggests CEOs are motivated through intrinsic awards and will balance their interests with those of other stakeholders. We use these theories to examine possible differences in CEO behaviors. This is important because different CEO behaviors might lead to differing impacts on important firm-level outcomes. This paper reviews the relevant agency and stewardship literatures, then offers propositions regarding CEO behaviors from agent and steward perspectives.

The Announcement Effect of Cash Dividend Changes on Share Prices: Evidence from Dhaka Stock Exchange

2017 ◽  
Vol 20 (04) ◽  
pp. 1750025 ◽  
Author(s):  
Naheed Rabbani
Keyword(s):  
Stock Exchange ◽  
Abnormal Returns ◽  
Information Leakage ◽  
Cash Dividend ◽  
Announcement Effect ◽  
Share Prices ◽  
Announcement Date ◽  
Positive Abnormal Return ◽  
Study Methodology ◽  
Dividend Increases

This paper investigates the announcement effect of cash dividend changes on share prices listed on the Dhaka Stock Exchange (DSE). Standard event study methodology is used to investigate the effect of an event window of [Formula: see text]3 to [Formula: see text]3 days relative to dividend announcement date. Cumulative abnormal returns (CAR) have also been measured for a 41-day window around announcement date. This study finds that shareholders earn only normal return on the announcement of dividend increases and no changes. However, a significant positive abnormal return (AR) is observed in the preannouncement period for a dividend increase which indicates some kind of information leakage before the announcement is actually made. The announcement of dividend decrease results in a significant negative AR on the announcement day and persists even 20 days after the announcement. Significant ARs following dividend decrease announcement reveal DSE is not a semi-strong form of efficient market.

scholarly journals Corporate governance and financial performance: an emerging economy perspective

2016 ◽  
Vol 13 (3) ◽  
pp. 228-236 ◽  
Author(s):  
Faizul Haque ◽  
Thankom G. Arun
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Agency Theory ◽  
Financial Reporting ◽  
Operating Performance ◽  
Jel Classification ◽  
Three Dimensions ◽  
Firm Level ◽  
Study Results ◽  
Governance Index

This paper investigates the influence of firm-level corporate governance on financial performance of the listed firms in Bangladesh. Agency theory suggests that better corporate governance reduces expropriation costs, which, in turn, enhances investors’ confidence in the firm’s future cash flow and growth prospects, leading to higher firm valuation. Likewise, a decrease in private benefits is likely to cause an improved operating performance. This paper uses a questionnaire survey-based corporate governance index (CGI), comprising of the three dimensions – shareholder rights, independence and responsibilities of the board and management, and financial reporting and disclosures. The study results partly confirm the prediction of the agency theory, with a statistically significant positive relationship between a firm’s corporate governance quality and its valuation, even though the relationship between firm level corporate governance and operating performance seems inconclusive. Keywords: corporate governance index, agency theory, financial performance, Bangladesh. JEL Classification: G32, G34, G38, O16

Marshallian Cross: An Alternative Justification and Related Issues

2013 ◽  
pp. 108-120 ◽  
Author(s):  
L. Grebnev
Keyword(s):  
Alternative Treatment ◽  
Supply And Demand ◽  
Firm Level ◽  
Economics Courses ◽  
Introductory Economics

The paper provides a justification of the laws of supply and demand using the concept of a marginal firm (technology) for the case of perfect competition.The ideological factor of excessive attention to the analysis of marginal parameters at the firm level in the introductory economics courses is discussed. The author connects these issues to the ideas of J. B. Clark and gives an alternative treatment of exploitation.

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