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Advances in Decision Sciences (ADS)

Advances in Decision Sciences (ADS)

Published by Asia University, Taiwan; Scientific and Business World

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Impact of Board Characteristics and State Ownership on Dividend Policy in Vietnam

Impact of Board Characteristics and State Ownership on Dividend Policy in Vietnam

Title

Impact of Board Characteristics and State Ownership on Dividend Policy in Vietnam

Authors

  • Dang-Khoa Duong
    (Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam)
  • Thi Thanh-Phuong Phan
    (Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam)
  • Kim-Hung Pho
    (Fractional Calculus, Optimization and Algebra Research Group, Faculty of Mathematics and Statistics, Ton Duc Thang University, Ho Chi Minh City, Vietnam)
  • Michael McAleer
    (Department of Finance, Asia University, Taiwan)

Abstract

The relationship between board characteristics and state ownership on dividend policy has been carefully examined in the literature in developed and emerging markets. This paper would seem to be the first to analyse the impacts of board gender diversity and state ownership in the Vietnam market for the following:(1) the number of female directors on the boards of directors is about 25%, which is the highest among South-East Asian countries; and (2) Vietnam has not fully transformed into a market economy, so the state ownership in the listed firm is apparent. Therefore, it is worth trying to examine the impacts of board gender diversity and state ownership on dividend policy in Vietnam. This paper illustrates that the female CEO and female CEO duality decrease the dividend ratio, while chairwomen tend to use dividend ratio as a tool to manage the company. Moreover, Boards of Directors (BODs) with more than three female members usually decrease the dividend payout ratio. The empirical findings are consistent with agency theory, as managers increase payouts to reduce free cash flow and agency costs in firms. The results also indicate that there is an inverse relationship between state ownership and the dividend payout ratio. It is due to higher state ownership allows firms to access external debts easily, so these firms pay high dividends to reduce agency costs. Moreover, governments perceive dividends from holding capital in listed firms as a source of revenue for the state budget. Therefore, firms with higher state ownership are more likely to increase dividend payouts.

Keywords

Dividend policy, State ownership, Female CEO and duality, Board gender diversity.

Classification-JEL

J16, K38, M14

Pages

1-34

https://doi.org/10.47654/v24y2020i4p1-34

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ISSN 2090-3359 (Print)
ISSN 2090-3367 (Online)

Asia University, Taiwan

Scientific and Business World

4.7
2023CiteScore
 
86th percentile
Powered by  Scopus
SCImago Journal & Country Rank
Q2 in Scopus
CiteScore 2023 = 4.7
CiteScoreTracker 2024 = 8.5
SNIP 2023 = 0.799
SJR Quartile = Q1
SJR 2024 = 0.814
H-Index = 20

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