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Balancing ecology and finance: The impact of carbon performance on dividend payout policy

Author

Listed:
  • Benkraiem, Ramzi
  • Berrich, Olfa
  • Lakhal, Nadia
  • Nizar, Hamza
  • Lakhal, Faten

Abstract

This paper investigates the effect of corporate carbon performance on the dividend payout policy. Based on an international sample from 2010 to 2022, the results show that firms that emit less carbon pay more dividends to their shareholders suggesting that managers are likely to balance all stakeholders’ needs. However, companies distribute less dividends following the Paris Agreement in 2015. This result suggests that the increased pressure on companies to engage in sustainability initiatives can reduce the amount of profit available for dividends. Furthermore, the positive effect of carbon performance on dividend payout policy is accentuated for companies with strong profitability and high corporate governance quality. Nevertheless, this positive effect is less prevalent in companies under highly competitive pressure.

Suggested Citation

  • Benkraiem, Ramzi & Berrich, Olfa & Lakhal, Nadia & Nizar, Hamza & Lakhal, Faten, 2025. "Balancing ecology and finance: The impact of carbon performance on dividend payout policy," Research in International Business and Finance, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:riibaf:v:74:y:2025:i:c:s0275531924005038
    DOI: 10.1016/j.ribaf.2024.102710
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