TY - JOUR
T1 - Infectious diseases, dividend policy, and independent directors
T2 - Evidence from textual analysis
AU - Ungpakorn, Saranyu
AU - Chatjuthamard, Pattanaporn
AU - Jiraporn, Pornsit
AU - Phiromswad, Piyachart
N1 - Funding Information:
This project is funded by National Research Council of Thailand (NRCT): N42A650683 and Sasin School of Management’s major research grant. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.
Publisher Copyright:
© 2023 Ungpakorn et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
PY - 2023/2
Y1 - 2023/2
N2 - We investigated the effect of uncertainty associated with infectious diseases on corporate dividend policy. We used a unique text-based measure of infectious diseases that includes not only the Covid-19, but also other important diseases, such as SARs, MERs, and Ebola. Based on a sample of 287,151 firm-year observations across four decades (from 1985 to 2021), our results show that a higher level of uncertainty associated with infectious diseases significantly reduce dividends. Interestingly, we also found that having more independent directors on the board mitigates the negative effect of uncertainty associated with infectious diseases on dividends which implies that the reduction in dividends was partly driven by agency conflicts. We performed several robustness checks which confirm that our findings are unlikely to be affected by endogeneity issues.
AB - We investigated the effect of uncertainty associated with infectious diseases on corporate dividend policy. We used a unique text-based measure of infectious diseases that includes not only the Covid-19, but also other important diseases, such as SARs, MERs, and Ebola. Based on a sample of 287,151 firm-year observations across four decades (from 1985 to 2021), our results show that a higher level of uncertainty associated with infectious diseases significantly reduce dividends. Interestingly, we also found that having more independent directors on the board mitigates the negative effect of uncertainty associated with infectious diseases on dividends which implies that the reduction in dividends was partly driven by agency conflicts. We performed several robustness checks which confirm that our findings are unlikely to be affected by endogeneity issues.
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U2 - 10.1371/journal.pone.0281109
DO - 10.1371/journal.pone.0281109
M3 - Article
C2 - 36730357
AN - SCOPUS:85147319124
SN - 1932-6203
VL - 18
JO - PloS one
JF - PloS one
IS - 2 February
M1 - e0281109
ER -