Adra, S., Gao, Y., Huang, J. et al. (1 more author) (2023) Geopolitical risk and corporate payout policy. International Review of Financial Analysis, 87. 102613. ISSN 1057-5219
Abstract
In this study, we examine the effects of geopolitical risk on corporate payout policy. Exploiting a news-based index of geopolitical risk, we find that firms adopt a more conservative payout policy by reducing share repurchases in response to greater geopolitical risk, whereas the effects of geopolitical risk on cash dividends are insignificant. Further analysis suggests that cash flow uncertainty and financial distress risk are two potential channels through which geopolitical risk affects corporate payout policy. We also show that the effects of geopolitical risk on share repurchase are more pronounced for firms with greater exposure to product market competition and those facing higher threats of financial distress. Overall, our study emphasizes the implications of geopolitical risk for corporate payout choice.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2023 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/bync-nd/4.0/). |
Keywords: | Geopolitical risk; Corporate payout policy; Share repurchase; Cash dividend |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 11 Jun 2024 10:32 |
Last Modified: | 11 Jun 2024 10:32 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.irfa.2023.102613 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:213205 |