Dividend Smoothing: An Empirical Analysis Based on Various National Differences

Kim, Hyunseok; Choi, Kyeong-seop

Korean Journal of Financial Studies 2016;45(3):477-506.
Published online June 30, 2016.

Hyunseok Kim, Kyeong-seop Choi

국가별 제도적 차이에 따른 배당스무딩 결정 요인

김현석, 최경섭

Abstract

This paper investigates how different national characteristics affect firms’ dividend smoothing around the world. Firstly, consistent with prior literature, known firm-level determinants of dividend smoothing support the agency-cost explanation of it, rather than the information-asymmetry one. Secondly, country-level determinants, i.e. investor protection, financial systems, legal regimes, culture, religion, are put in regressions. Firms in countries with stronger investor protection smooth dividends less, which supports the ‘substitute model’ (La Porta et al., 2000). Firms smooth dividends more in market-based countries, in common-law countries, in more individualistic, masculine, uncertainty-avoiding, indulgent countries, and in Protestant countries. Finally, therefore, collecting the national characteristics that have positive effects on dividend smoothing, we come to adumbrate the Englishspeaking Anglo-Saxon world where firms smooth dividends the most.

Key Words: 국가적 특징,대리인가설,문화,배당스무딩,정보비대칭가설,Agency Cost,Culture,Dividend Smoothing,Information Asymmetry,National Characteristics