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Dividend policy framework and bank risk-taking in Africa: do women inclusion in governance system offer new insight?

Author

Listed:
  • Daniel Ofori-Sasu

    (University of Ghana Business School
    Central University)

  • Gloria Clarissa Dzeha

    (Central University)

  • Vera Ogeh Fiador

    (University of Ghana Business School)

  • Joshua Yindenaba Abor

    (University of Ghana Business School)

Abstract

This study examines the role of women included in governance system in explaining the impact of dividend policy framework on the risk-taking of banks, using a panel dataset of 52 African countries over the period, 2006–2020. The empirical outcome confirms that independent women on the board has a lower probability of paying dividend, reduce dividend yield and induce less risk-taking of banks while women in country-level governance position seek to protect the interest of shareholders and subsequently increase the likelihood of dividend payments and risk-taking of banks. The study found that banks that pay dividends face stricter market discipline, which in turn reduces banks' risk-taking. The study found that dividend policy framework generally acts as a complement for risk-taking when independent women are included in corporate boards while it acts as a substitute control device for banks’ risk-taking when women are included in country-level governance positions. Based on the net effects, the study found robust and strong evidence to support that the dividend policy framework reduces the risk-taking at higher level of women included in governance system.

Suggested Citation

  • Daniel Ofori-Sasu & Gloria Clarissa Dzeha & Vera Ogeh Fiador & Joshua Yindenaba Abor, 2023. "Dividend policy framework and bank risk-taking in Africa: do women inclusion in governance system offer new insight?," Future Business Journal, Springer, vol. 9(1), pages 1-17, December.
    • Handle: RePEc:spr:futbus:v:9:y:2023:i:1:d:10.1186_s43093-023-00264-7
    DOI: 10.1186/s43093-023-00264-7
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    More about this item

    Keywords

    Women inclusion in governance system; Dividend policy; Risk-taking;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory

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