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The moderating effect of corporate governance on the relationship between social capital and cash dividend policies in the companies listed in the Tehran Stock Exchange

    Authors

    1 Department of Accounting, Faculty of Economic and Administrative Sciences, Mazandaran University, Babolsar, Iran

    2 Head of Accounting Department

    3 PhD student in accounting at university of Mazandaran, Babolsar, Iran

,

Document Type : Research Paper

Abstract

Purpose: Several studies, conducted on the impact of non-monetary values, including culture, norms, or religion on corporate payment policies, show the effect of these factors on the decisions adopted by a company. Hence, the present study aims to introduce social capital as a non-monetary factor, to investigate its effect on decisions related to cash dividend payments, as well as to examine the impact of weak corporate governance on this relationship.
Method: The study is a descriptive, correlational and post-event research that examined 97 companies listed in Tehran Stock Exchange during 2009 to 2018 (10 years) using multivariate regression model.
Results: according to the research findings, social capital has a positive and significant relationship with dividends; however, corporate governance does not affect the relationship between social capital and dividends.
Conclusion: considering the positive and significant relationship between social capital and dividends, it can be concluded that this external variable affects the company's internal decisions, which can be considered as a factor contributing to reduce supervision and hence, can reduce agency costs.
Contributions: The results obtained from this study can help investors looking for cash dividends to choose a company to invest in and select companies operating in places with higher social capital; It also helps corporate shareholders to emphasize the social capital of the place of business, rather than focusing solely on the financial costs, created by agency disputes, and to select those companies with lower agency costs to invest in.
 

Keywords

References
References
 
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Financial Accounting Knowledge
Volume 8, Issue 28 - Serial Number 28
April 2021
Pages 93-120
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