Cash Dividends and Investor Protection in Asia

Posted: 28 Mar 2013 Last revised: 9 Sep 2014

See all articles by Abhinav Goyal

Abhinav Goyal

University College Cork

Cal B. Muckley

University College Dublin

Date Written: March 27, 2013


We study the importance of investor rights in payout policy determination in Asia, using a sample of up to 52,778 firm years. The listed Asian firms located in relatively high investor protection, common law countries, have a greater tendency to pay out and, if they do so, they tend to pay out more. We also examine the importance of distinctive creditor and minority shareholder rights in respect to payout policy determination. In our study of a variety of pay out events (decisions to pay out, to initiate or omit pay out and to markedly increase or decrease pay out), we show that this set of pay out events is principally determined by competing creditor and minority shareholder rights, rather than managerial sought reputation related effects, to diminish the cost of capital. Our findings indicate that creditors exert significant and far reaching influence over corporate payout policy decision-making, however, the importance of the agency costs of equity predominate.

Keywords: Payout policy, dividends, share repurchases, international financial markets

JEL Classification: G15, G32, G35

Suggested Citation

Goyal, Abhinav and Muckley, Cal B., Cash Dividends and Investor Protection in Asia (March 27, 2013). International Review of Financial Analysis, 29 (2013), 31-43, Available at SSRN:

Abhinav Goyal (Contact Author)

University College Cork ( email )

O'Rahilly Building
College Road
+353 (0)21 490 2839 (Phone)

Cal B. Muckley

University College Dublin ( email )

Blackrock, Co. Dublin
+353-1-716-8091 (Phone)

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