corporate governance
Introduction
I discuss the paper in the following pattern: section I summarizes the main points of the paper. Section II analyzes the paper in light of literature that agrees and disagrees with different arguments Section III will provide conclusion based on the analysis and critiques to the paper while discussing the main contribution to academic knowledge.
I. Study Summary
The objective of this paper is to examine the relationship between corporate governance on dividends payout in Canada to better understand "why companies pay dividends".
In the light of agency theory, Adjaoud and Ben-Amar tested two competing hypothesis, which are outcome and substitution hypothesis. They chose Canada to examine the relationship between corporate governance and corporate dividend payments for two reasons; first, the comparability between Canada and USA from the perspective of stock market development, and legal protection offered to minority shareholders. Secondly, the difference between Canada and many other law countries in the concentration of ownership and the frequent use of dual class share.
The two variables in the relationship are the dividend policy, the dependent variable, and the corporate governance, the independent variable. Adjaoud and Ben-Amar used the dividend payout as a proxy for dividend policy and Globe & Mail annual corporate governance rating as a proxy for corporate governance quality.
The sample data used in the study was comprised of 714 firm-years listed on Toronto stock exchange. The sample was divided into two categories according to the dividend payouts, the first consist of 397 paying firms and 317 non paying firms. The processing of such sample data showed the following findings;
1- The result of regression of dividend payout on corporate governance score showed a positive relationship between corporate governance quality and dividend payment.
2- Consistent with studies that claim that companies maintain constant pattern of
I discuss the paper in the following pattern: section I summarizes the main points of the paper. Section II analyzes the paper in light of literature that agrees and disagrees with different arguments Section III will provide conclusion based on the analysis and critiques to the paper while discussing the main contribution to academic knowledge.
I. Study Summary
The objective of this paper is to examine the relationship between corporate governance on dividends payout in Canada to better understand "why companies pay dividends".
In the light of agency theory, Adjaoud and Ben-Amar tested two competing hypothesis, which are outcome and substitution hypothesis. They chose Canada to examine the relationship between corporate governance and corporate dividend payments for two reasons; first, the comparability between Canada and USA from the perspective of stock market development, and legal protection offered to minority shareholders. Secondly, the difference between Canada and many other law countries in the concentration of ownership and the frequent use of dual class share.
The two variables in the relationship are the dividend policy, the dependent variable, and the corporate governance, the independent variable. Adjaoud and Ben-Amar used the dividend payout as a proxy for dividend policy and Globe & Mail annual corporate governance rating as a proxy for corporate governance quality.
The sample data used in the study was comprised of 714 firm-years listed on Toronto stock exchange. The sample was divided into two categories according to the dividend payouts, the first consist of 397 paying firms and 317 non paying firms. The processing of such sample data showed the following findings;
1- The result of regression of dividend payout on corporate governance score showed a positive relationship between corporate governance quality and dividend payment.
2- Consistent with studies that claim that companies maintain constant pattern of