The effects of busy board on firm's probability to pay dividends
Using a comprehensive data sample covering the period 2000–2017, from the agency problem perspective, this paper reveals a significantly negative relationship between board busyness and firm's probability of paying dividends. The empirical results show that firms tend to have a lower likelihood of paying out dividends if independent directors assume multiple board seats across several outside companies. This negative association still holds when firm's share repurchase is taken into consideration. We also demonstrate that this negative association is subject to the context of firm innovation, independent director age, industry, and economic conditions. Our results are robust to alternative models, different measures of industry classification, and dividend payout amount.
Research in International Business and Finance
Sun, Liang and Yu, Huaibing, "The effects of busy board on firm's probability to pay dividends" (2022). Kean Publications. 628.