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Title: Board Characteristics and Dividend Policy: Australian Evidence
Contributor(s): Yarram, Subba Reddy  (author)
Publication Date: 2011
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Abstract: The present study makes an important contribution to the growing literature on international corporate governance by finding a significant relationship between board independence and average dividend payout of a sample of 413 Australian firms for the period 2004 to 2009. This finding implies that firms with highly independent boards contribute to corporate governance by allowing dividends to play significant disciplinary and monitoring roles. These findings are consistent with free cash flow hypothesis (Jensen, 1986) and agency cost view of Easterbrook (1984). The study also finds that board size (median of seven directors) and board independence (median of 75 per cent) in the study period of 2004 to 2009 compare remarkably similar to the findings for the year 1996 by Kiel and Nicholson (2003). However chairman-CEO duality has considerably reduced to 5.2 per cent in 2004-2009 period compared to 23 per cent in 1996. Board size and duality have no significant influence on the dividend payout of Australian firms when controlled for other variables identified in prior literature, however, board independence continue to exert significant positive influence on average dividend payout.
Publication Type: Conference Publication
Conference Name: World Business and Economics Research Conference, Auckland, New Zealand, 12th - 13th December, 2011
Conference Details: World Business and Economics Research Conference, Auckland, New Zealand, 12th - 13th December, 2011
Source of Publication: Proceedings of the World Business and Economics Research Conference, p. 1-21
Publisher: World Business Institute Australia
Place of Publication: online
Field of Research (FOR): 150201 Finance
140304 Panel Data Analysis
Socio-Economic Outcome Codes: 900101 Finance Services
Peer Reviewed: Yes
HERDC Category Description: E1 Refereed Scholarly Conference Publication
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