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How Corporate Governance affects payout policy under agency problems and external financing constraints

Title
How Corporate Governance affects payout policy under agency problems and external financing constraints
Author
이은정
Keywords
Payout policy; Corporate governance; Agency problems; External financing constraints
Issue Date
2009-11
Publisher
ELSEVIER SCIENCE BV
Citation
JOURNAL OF BANKING & FINANCE, v. 33, No. 11, Page. 2093-2101
Abstract
This paper analyzes the effect of corporate governance on the payout policy when a firm has both agency problems and external financing constraints. We empirically test whether strong corporate governance would lead to higher payout to minimize agency problems (outcome hypothesis), or to lower payout to avoid costly external financing (substitute hypothesis). We find that firms with higher (lower) external financing constraints tend to decrease (increase) payout ratio with an improvement in their corporate governance. The results are consistent with our hypothesis that the relation between payout and corporate governance is reversed depending on the relative sizes of agency and external financing costs. (C) 2009 Elsevier B.V. All rights reserved.
URI
https://www.sciencedirect.com/science/article/pii/S0378426609001046https://repository.hanyang.ac.kr/handle/20.500.11754/76516
ISSN
0378-4266
DOI
10.1016/j.jbankfin.2009.05.003
Appears in Collections:
COLLEGE OF BUSINESS AND ECONOMICS[E](경상대학) > BUSINESS ADMINISTRATION(경영학부) > Articles
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