The Relationship between Audit Mechanisms and Dividend Payout Policy within the Framework of Corporate Governance: The Case of Turkey

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ERDAŞ M. L., BACHA SIMÖES E.

JOURNAL OF ECONOMY CULTURE AND SOCIETY, sa.62, ss.255-284, 2020 (ESCI) identifier

  • Yayın Türü: Makale / Tam Makale
  • Basım Tarihi: 2020
  • Doi Numarası: 10.26650/jecs2019-0120
  • Dergi Adı: JOURNAL OF ECONOMY CULTURE AND SOCIETY
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Sayfa Sayıları: ss.255-284
  • Anahtar Kelimeler: Corporate Governance, Audit Committee, Independent Board Member, Payout Policy, MANAGERIAL OWNERSHIP, LARGE SHAREHOLDERS, ASYMMETRIC INFORMATION, BOARD COMPOSITION, EMERGING MARKET, AGENCY PROBLEMS, PANEL-DATA, FIRM, IMPACT, PERFORMANCE
  • Akdeniz Üniversitesi Adresli: Evet

Özet

Do corporate governance mechanisms implemented in firms affect dividend payout policies? What is the role of the audit committee, one of the corporate governance mechanisms, in the dividend payout policies implemented by firms? From this point of view, this study aims to examine the relationship between the audit mechanisms and cash dividend payout policies. We have used data from firms listed in Borsa Istanbul, covering the period 2002-2014, and the paper employs a regression analyses performed by using the System GMM estimation method. As a result of the analysis, the higher the level of independence of the audit committee, the higher the cash dividend payout rate. Another finding obtained in the study was a statistically significant nonlinear relationship between the size of the board of directors and the cash dividend payout ratio. The findings reveal the importance of the audit committee in firms. Therefore, this study reveals that corporate governance practices have an impact on dividend payout decisions of firms listed at the Borsa Istanbul. Based on the results, as a result of the development of audit mechanisms, one of the corporate governance practices, it is understood that efficiency can be achieved in terms of cash dividend payout for investors.