Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries
The paper examines the moderating effects of governance quality on stock liquidity and dividend relationship. Past empirical studies on the link between stock liquidity and dividend suggest there are mixed findings between them. A negative relationship suggests stock liquidity and dividend are a sub...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Penerbit Universiti Kebangsaan Malaysia
2019
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| Online Access: | http://psasir.upm.edu.my/id/eprint/81393/ http://psasir.upm.edu.my/id/eprint/81393/1/Moderating%20effects%20of%20governance%20quality%20on%20the%20relationship%20between%20stock%20liquidity%20and%20dividend%20in%20emerging%20market%20countries.pdf |
| _version_ | 1848859093402386432 |
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| author | Bakri, Mohd Ashari Nordin, Bany Ariffin Amin Tunde, Matemilola Bolaji Lau, Wei Theng |
| author_facet | Bakri, Mohd Ashari Nordin, Bany Ariffin Amin Tunde, Matemilola Bolaji Lau, Wei Theng |
| author_sort | Bakri, Mohd Ashari |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | The paper examines the moderating effects of governance quality on stock liquidity and dividend relationship. Past empirical studies on the link between stock liquidity and dividend suggest there are mixed findings between them. A negative relationship suggests stock liquidity and dividend are a substitute which aligns with the liquidity hypothesis. On the other hand, a positive relationship between stock liquidity and dividend suggests stock liquidity informational effect increases a firm’s incentive to pay dividends. Moderating factors could have contributed to such mixed findings. Therefore, this study suggested governance quality could be one of the moderating factors that contributed to the inconsistency findings. Governance quality has been known to mitigate information asymmetry that made firm pay more dividends by formulating and promoting sound policies. Thus, this study aimed to ascertain the moderating factors of governance quality on the relationship between stock liquidity and dividend. By using a sample from 22 emerging market countries, we adopted logistic panel random effect to estimate the model. Adopting the governance quality measurements developed by the World Bank, our empirical results found that political stability, government effectiveness, regulation quality and control of corruption are among the factors that moderated the relationship between stock liquidity and dividend. |
| first_indexed | 2025-11-15T12:23:51Z |
| format | Article |
| id | upm-81393 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T12:23:51Z |
| publishDate | 2019 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-813932021-01-31T17:14:27Z http://psasir.upm.edu.my/id/eprint/81393/ Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries Bakri, Mohd Ashari Nordin, Bany Ariffin Amin Tunde, Matemilola Bolaji Lau, Wei Theng The paper examines the moderating effects of governance quality on stock liquidity and dividend relationship. Past empirical studies on the link between stock liquidity and dividend suggest there are mixed findings between them. A negative relationship suggests stock liquidity and dividend are a substitute which aligns with the liquidity hypothesis. On the other hand, a positive relationship between stock liquidity and dividend suggests stock liquidity informational effect increases a firm’s incentive to pay dividends. Moderating factors could have contributed to such mixed findings. Therefore, this study suggested governance quality could be one of the moderating factors that contributed to the inconsistency findings. Governance quality has been known to mitigate information asymmetry that made firm pay more dividends by formulating and promoting sound policies. Thus, this study aimed to ascertain the moderating factors of governance quality on the relationship between stock liquidity and dividend. By using a sample from 22 emerging market countries, we adopted logistic panel random effect to estimate the model. Adopting the governance quality measurements developed by the World Bank, our empirical results found that political stability, government effectiveness, regulation quality and control of corruption are among the factors that moderated the relationship between stock liquidity and dividend. Penerbit Universiti Kebangsaan Malaysia 2019 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/81393/1/Moderating%20effects%20of%20governance%20quality%20on%20the%20relationship%20between%20stock%20liquidity%20and%20dividend%20in%20emerging%20market%20countries.pdf Bakri, Mohd Ashari and Nordin, Bany Ariffin Amin and Tunde, Matemilola Bolaji and Lau, Wei Theng (2019) Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries. Jurnal Pengurusan, 57. pp. 1-20. ISSN 0127-2713 https://ejournal.ukm.my/pengurusan/article/view/36855 |
| spellingShingle | Bakri, Mohd Ashari Nordin, Bany Ariffin Amin Tunde, Matemilola Bolaji Lau, Wei Theng Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries |
| title | Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries |
| title_full | Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries |
| title_fullStr | Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries |
| title_full_unstemmed | Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries |
| title_short | Moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries |
| title_sort | moderating effects of governance quality on the relationship between stock liquidity and dividend in emerging market countries |
| url | http://psasir.upm.edu.my/id/eprint/81393/ http://psasir.upm.edu.my/id/eprint/81393/ http://psasir.upm.edu.my/id/eprint/81393/1/Moderating%20effects%20of%20governance%20quality%20on%20the%20relationship%20between%20stock%20liquidity%20and%20dividend%20in%20emerging%20market%20countries.pdf |