How does CSR disclosure affect dividend payments in emerging markets?

• Published in: Emerging markets review Vol. 46; p. 100747
• Main Authors: Saeed, Abubakr, Zamir, Farah
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01-03-2021
• Subjects: Agency issues; Corporate social responsibility disclosures; Dividend payout; Dividend yield; Emerging markets; Dividend yield; Dividend payout; Agency issues; Emerging markets; Corporate social responsibility disclosures
• ISSN: 1566-0141; 1873-6173
• DOI: 10.1016/j.ememar.2020.100747

This article examines the nexus between corporate social responsibility disclosures (CSRD) and dividend payout decisions in the context of emerging markets. Using hand-collected sample of listed firms from India, China, Indonesia, Pakistan, Malaysia, Korea, Turkey, and Russia over the period 2010–2018, our results show that CSR disclosures exert a negative impact on corporate dividend payments. Further, this effect is more prevalent for firms having higher institutional ownership. However, the results remain unaffected by the differences in legal origin i.e. civil law or common law, of the sample countries. Further, our main results are supported by a number of sensitivity tests, including reduced sample size, alternative dividend payment measures, and estimation techniques.
•The relationship between CSR disclosures and dividend policy is examined in the context of emerging economies.•Results show the negative impact of CSR disclosures on corporate dividend payments.•This effect is stronger for firms having higher institutional ownership.•However, the results remain unaffected by the differences in legal origin, common law or civil law, of the sample countries.