The Relationship Between Corporate Governance and Dividend Policy in Taiwanese Banking Industry

• Main Authors: Lee, Hanjui, 李函叡
• Other Authors: Liu, Yongchin
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/34760435319459716696

碩士 === 亞洲大學 === 財務金融學系碩士班 === 100 === This study aims to examine the relationship between corporate governance and dividend policy for Taiwanese banks under capital adequacy requirements. Also, this study considers the effect of corporate governance on the relationship between firm growth opportunities and dividend policies. The empirical results indicate that in terms of dividend amount as a policy, when there is a decrease in director board size and increase in insider’s ownership, dividend amount will boost, but if insider’s ownership is at a higher level, the dividend amount will decrease. The other governance mechanisms, that is, independent director fraction, institutional investor ownership, and share-earnings bias, do not significantly affect dividend amount. Moreover, a lower director board size, higher insider ownership and higher independent director fraction can reduce the positive relationship between growth opportunities and dividend amount. This situation indicates that for banks with high growth opportunities, the three governance mechanisms can replace part of the governance effects of the dividend policy. Thus, there is a difference in the governance-dividend relation between firms with different growth opportunities. In terms of whether paying dividends as a policy, the effect of insider’s ownership is still the same as that on the dividend amount policy. That is, a higher insider ownership will increase the probability of paying dividends. However, when the insider ownership reaches a certain (high) level, there is a decrease in the probability of the dividend payout. Additionally, the better the governances measured as the institutional investor ownership and share-earnings bias, the lower the possibility of the dividend paying. Therefore, there is a gap in the effects of different governance mechanisms on the possibility of the dividend payout. Moreover, only the insider ownership significantly affects the positive relationship between the dividend payout possibility and bank growth opportunities, but the effect is positive. Namely, for banks with higher growth opportunities, when their insider ownerships are not at the high levels, the larger the ownerships, the higher the probability of paying dividends, but the less the dividend amounts.