Effect of Corporate Governance on Free Cash Flow via Dividend Payout

Q3 Business, Management and Accounting

Journal of Asia-Pacific Business Pub Date : 2022-10-02 DOI:10.1080/10599231.2022.2145624

Affaf Asghar Butt, Sadaf Murtaza, A. Shahzad, Jamshaid Ahmad

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引用次数: 1

Abstract

ABSTRACT This study aims to investigate the effect of corporate governance mechanisms (i.e., board composition, insider ownership, block holder ownership, and audit quality) on free cash flow (FCF) through the dividend policy of the firms listed on the Pakistan Stock Exchange (PSX). The sample of non-financial firms was taken from the KSE-100 index from 2008 to 2017. The mediation technique developed in 1986 by Baron and Kenny is used. The results revealed that CG mechanisms help to minimize the agency problem of free cash flow. Strong governance attributes results in higher dividend payment. This study concludes that a high dividend payout has a negative effect on FCF. Overall, this study confirms the full mediating effects of dividend payout on the relationship between board independence and FCF, insider ownership and FCF, audit quality and FCF, and partial mediation of dividend payout on the link between board meetings and FCF. The results suggest that firms should build and execute their policies relating to corporate governance to manage their resources efficiently; this can help reduce FCF and minimize agency problems.

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公司治理对股利支付自由现金流的影响

摘要本研究旨在通过巴基斯坦证券交易所（PSX）上市公司的股息政策，研究公司治理机制（即董事会组成、内部人所有权、集体持有人所有权和审计质量）对自由现金流（FCF）的影响。非金融企业样本取自2008年至2017年的KSE-100指数。使用了Baron和Kenny于1986年开发的调解技术。结果表明，CG机制有助于最大限度地减少自由现金流的代理问题。强大的治理属性会带来更高的股息支付。本研究得出结论，高股息支出对FCF有负面影响。总体而言，本研究证实了派息对董事会独立性与FCF、内部人所有权与FCF之间关系、审计质量与FCF的完全中介作用，以及派息对股东大会与FCF联系的部分中介作用。研究结果表明，企业应制定和执行与公司治理相关的政策，以有效地管理其资源；这可以帮助减少FCF并最大限度地减少代理问题。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Asia-Pacific Business Business, Management and Accounting-Business and International Management

CiteScore

2.50

自引率

0.00%

发文量

期刊介绍： Present circumstances underscore the need to improve the understanding of conducting business with and within the Asia-Pacific countries. The Journal of Asia-Pacific Business™ provides a blend of cutting-edge knowledge and practical applications on business management and marketing strategy. In the Journal of Asia-Pacific Business™, you will find articles and feature sections that provide a pragmatic view of the business environment in this dynamic region. This essential resource offers readers a good blend of descriptive, conceptual, and theoretical articles dealing with current topics.