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The Effect of Managerial Ability on a Firms Dividend Policy: Evidence from Korea

Author

Listed:
  • Park, Soo Yeon

    (Chung-Ang University)

  • Song, Younghyo

    (Korea University)

Abstract

This study examined the effect of managerial ability on a firm’s dividend policy. In addition, this study investigated how the type of manager and their different risk characteristicsrepresented in this study by professional CEOs and owner CEOs-affect the relationship between managerial ability and the firm’s dividend policy. We used 4,593 firm-year observations from the KOSPI for the period 2003–2013, lending our findings considerable power. The results showed that managerial ability was significantly positively associated with a firm’s dividend policy, as proxied by the propensity for dividend payments. Moreover, the positive relationship between managerial ability and dividend payments was particularly pronounced in firms with professional CEOs. These results suggest that professional CEOs strengthen the positive effect of managerial ability on increased dividend payments.

Suggested Citation

  • Park, Soo Yeon & Song, Younghyo, 2019. "The Effect of Managerial Ability on a Firms Dividend Policy: Evidence from Korea," International Journal of Entrepreneurship, Allied Business Academies, vol. 23(1), May.
    • Handle: RePEc:ris:ijentr:0093
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    More about this item

    Keywords

    Managerial Ability; Dividend Policy; Professional CEO; Owner CEO; DEA Analysis.;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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