Shareholder Activism and Dividend Policy of the Firms: The Moderating Role of Financial Distress

IF 3 Q2 BUSINESS

Vision-The Journal of Business Perspective Pub Date : 2022-11-26 DOI:10.1177/09722629221129086

Shailesh Rastogi, Jagjeevan Kanoujiya, Kuldeep Singh

{"title":"Shareholder Activism and Dividend Policy of the Firms: The Moderating Role of Financial Distress","authors":"Shailesh Rastogi, Jagjeevan Kanoujiya, Kuldeep Singh","doi":"10.1177/09722629221129086","DOIUrl":null,"url":null,"abstract":"Shareholder activism (SHA) has caught the fancy of all the stakeholders in the corporate world, including policymakers. It is here for the long haul. However, the role of SHA in operating performance and valuation is equivocal. In addition, there is a dearth of research on SHA’s impact on profit distribution decisions. This research gap is the primary motivation for the current study. Measuring SHA is a challenge, which is undertaken in the study in the form of building an SHA index. Panel data of 76 diversified non-financial firms is gathered for 5 years (2015–2016 to 2019–2020). Static and dynamic panel data econometrics are deployed to estimate three models (baseline, square and model with the interaction term). It is found that SHA linearly and positively impacts the dividend pay-out. In addition, financial stability (inverse of financial distress) positively moderates the SHA’s association for dividends. Investors preferring dividends can use these findings to their gain, is one of the main implications of the study. It is recommended that policymakers should take some legislative action to protect managers from the negative influence of SHA, especially regarding dividend decisions.","PeriodicalId":44860,"journal":{"name":"Vision-The Journal of Business Perspective","volume":"15 1","pages":""},"PeriodicalIF":3.0000,"publicationDate":"2022-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Vision-The Journal of Business Perspective","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1177/09722629221129086","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS","Score":null,"Total":0}

引用次数: 1

Abstract

Shareholder activism (SHA) has caught the fancy of all the stakeholders in the corporate world, including policymakers. It is here for the long haul. However, the role of SHA in operating performance and valuation is equivocal. In addition, there is a dearth of research on SHA’s impact on profit distribution decisions. This research gap is the primary motivation for the current study. Measuring SHA is a challenge, which is undertaken in the study in the form of building an SHA index. Panel data of 76 diversified non-financial firms is gathered for 5 years (2015–2016 to 2019–2020). Static and dynamic panel data econometrics are deployed to estimate three models (baseline, square and model with the interaction term). It is found that SHA linearly and positively impacts the dividend pay-out. In addition, financial stability (inverse of financial distress) positively moderates the SHA’s association for dividends. Investors preferring dividends can use these findings to their gain, is one of the main implications of the study. It is recommended that policymakers should take some legislative action to protect managers from the negative influence of SHA, especially regarding dividend decisions.

查看原文本刊更多论文

股东激进主义与公司股利政策:财务困境的调节作用

股东行动主义(SHA)已经吸引了企业界所有利益相关者的注意，包括政策制定者。它是长期存在的。然而，SHA在经营业绩和估值中的作用是模棱两可的。此外，关于SHA对利润分配决策影响的研究也比较少。这一研究缺口是本研究的主要动机。对SHA的测量是一项挑战，在本研究中以构建SHA指数的形式承担了这一挑战。收集了76家多元化非金融企业5年(2015-2016年至2019-2020年)的面板数据。使用静态和动态面板数据计量经济学来估计三种模型(基线、平方和带有交互项的模型)。结果表明，SHA对股利支付具有线性正向影响。此外，金融稳定(财务困境的逆)正调节SHA与股息的关联。偏爱股息的投资者可以利用这些发现来获得收益，这是本研究的主要含义之一。建议政策制定者采取一些立法行动，保护管理者免受SHA的负面影响，特别是在股息决策方面。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Vision-The Journal of Business Perspective Multiple-

CiteScore

4.60

自引率

0.00%

发文量

121

期刊介绍： Vision-The Journal of Business Perspective is a quarterly peer-reviewed journal of the Management Development Institute, Gurgaon, India published by SAGE Publications. This journal contains papers in all functional areas of management, including economic and business environment. The journal is premised on creating influence on the academic as well as corporate thinkers. Vision-The Journal of Business Perspective is published in March, June, September and December every year. Its targeted readers are researchers, academics involved in research, and corporates with excellent professional backgrounds from India and other parts of the globe. Its contents have been often used as supportive course materials by the academics and corporate professionals. The journal has been providing opportunity for discussion and exchange of ideas across the widest spectrum of scholarly opinions to promote theoretical, empirical and comparative research on problems confronting the business world. Most of the contributors to this journal range from the outstanding and the well published to the upcoming young academics and corporate functionaries. The journal publishes theoretical as well as applied research works.