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Does Investor Protection Affect Managements’ Decision to Pay Dividend? Evidence from South Asia

Abstract

During last fifty years, financial researchers’ remained unable to reach a consensus on the determinants of dividend policy. The scope of majority of recent studies was limited to a single country, whereas, a little attention was given to cross country comparison of factors affecting dividend policy, especially in emerging economies. The present study attempted to fill this gap by analyzing the data from listed companies of four South Asian countries i.e. Bangladesh, India, Pakistan and Sri Lanka, using lest square regression models. The main focus of this study was to analyze the impact of investor protection and uncertainty avoidance on management’s decision to pay dividends. The results supported the dividend outcome model. Present study also described the impact of different levels of investor protection on dividend payout at different uncertainty avoidance levels.

Keywords

Payout Policy, Investors’ Protection, Culture, South Asia

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