ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe
This study investigates the relationship between environmental, social, and governance (ESG) scores and dividend policies, considering the moderating role of audit quality. Based on data for Western European listed companies (leaders in ESG revolution) over the period 2010–2019, panel regression ana...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2023-03-01
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| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845022000965 |
| _version_ | 1797857668232118272 |
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| author | R.M. Ammar Zahid Alina Taran Muhammad Kaleem Khan Ionela-Corina Chersan |
| author_facet | R.M. Ammar Zahid Alina Taran Muhammad Kaleem Khan Ionela-Corina Chersan |
| author_sort | R.M. Ammar Zahid |
| collection | DOAJ |
| description | This study investigates the relationship between environmental, social, and governance (ESG) scores and dividend policies, considering the moderating role of audit quality. Based on data for Western European listed companies (leaders in ESG revolution) over the period 2010–2019, panel regression analyses show a significant positive relationship between ESG and dividend payouts. Thus, companies with strong ESG practices prove their stakeholders' and shareholders' orientation, maintaining their dividend payments. However, involvement in high-quality ESG practices slows dividend growth. Audit quality has also a negative moderating effect on ESG–dividend links, prevalent at the firms whose financial audit is conducted by Big Four auditors, with no statistically significant results for ESG assurance quality. The findings are robust to sensitivity analyses based on alternative measures and estimation techniques. These results have implications for investors, management, analysts, and policy makers, providing significant lessons for companies and markets concerned about extending their ESG policies. |
| first_indexed | 2024-04-09T21:00:30Z |
| format | Article |
| id | doaj.art-22e42fdc065646bbb3da477b1bfef55f |
| institution | Directory Open Access Journal |
| issn | 2214-8450 |
| language | English |
| last_indexed | 2024-04-09T21:00:30Z |
| publishDate | 2023-03-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj.art-22e42fdc065646bbb3da477b1bfef55f2023-03-29T09:26:49ZengElsevierBorsa Istanbul Review2214-84502023-03-01232350367ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western EuropeR.M. Ammar Zahid0Alina Taran1Muhammad Kaleem Khan2Ionela-Corina Chersan3School of Accounting, Yunnan Technology and Business University, Yunnan, PR ChinaDepartment of Business Administration, Faculty of Business and Administrative Sciences, Istanbul Okan University, Turkiye and The Body of Expert and Licensed Accountants of Romania, Suceava, Romania; Corresponding author.Asia-Australia Business College, Liaoning University, PR ChinaFaculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iasi, RomaniaThis study investigates the relationship between environmental, social, and governance (ESG) scores and dividend policies, considering the moderating role of audit quality. Based on data for Western European listed companies (leaders in ESG revolution) over the period 2010–2019, panel regression analyses show a significant positive relationship between ESG and dividend payouts. Thus, companies with strong ESG practices prove their stakeholders' and shareholders' orientation, maintaining their dividend payments. However, involvement in high-quality ESG practices slows dividend growth. Audit quality has also a negative moderating effect on ESG–dividend links, prevalent at the firms whose financial audit is conducted by Big Four auditors, with no statistically significant results for ESG assurance quality. The findings are robust to sensitivity analyses based on alternative measures and estimation techniques. These results have implications for investors, management, analysts, and policy makers, providing significant lessons for companies and markets concerned about extending their ESG policies.http://www.sciencedirect.com/science/article/pii/S2214845022000965G35M14M42 |
| spellingShingle | R.M. Ammar Zahid Alina Taran Muhammad Kaleem Khan Ionela-Corina Chersan ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe Borsa Istanbul Review G35 M14 M42 |
| title | ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe |
| title_full | ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe |
| title_fullStr | ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe |
| title_full_unstemmed | ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe |
| title_short | ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe |
| title_sort | esg dividend payout policy and the moderating role of audit quality empirical evidence from western europe |
| topic | G35 M14 M42 |
| url | http://www.sciencedirect.com/science/article/pii/S2214845022000965 |
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