Corporate Governance Score and Signal on Dividend Policy in Lowering Agency Problem
Keywords:
Corporate Governance Scoring, Signaling, Dividend PolicyAbstract
This research focused on corporate governance scores and their signaling in relation to dividend payment policies in order to lower the incidence of agency problems. Panel data for the period 2009-2013 of listed companies in the SET, except those in the financial sector, was collected and analyzed using Ordered Probit models and Multivariate Probit models. The results indicated that corporate governance scores, free cash flow, previous dividend policy, profitability, firm size and leverage ratios were all significant factors in determining decisions concerning dividend payment policy. As a result, the findings confirmed that good corporate governance helped in reducing agency problems.
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