Does Information Asymmetry Affect Dividend Policy? Analysis Using Market Microstructure Variables

Sustainability

Seonhyeon Kim¹  Jin-young Jung²  Sung-woo Cho³ 

[1] Business School, Korea University, Seoul 02841, Korea;College of Business Administration, Inha University, Incheon 22212, Korea;College of Computing, Sungkyunkwan University, Suwon 16419, Korea;

关键词: dividend yield;    information asymmetry;    pecking order theory;    cost of capital;    internal financing;   

DOI  :  10.3390/su13073627

来源: DOAJ

【 摘 要 】

This study analyzes the relationship between information asymmetry and dividend policy in an emerging market, Korea. We adopt several proxies for information asymmetry, such as the Glosten–Harris and Hasbrouk–Foster–Viswanathan models, drawn from market microstructure literature. This study finds a negative relationship between information asymmetry and dividend yields, which appears to be particularly strong when firms have difficulty raising external capital because they have high systematic risk, financial constraints, or low stock liquidity. This result, based on an analysis using market microstructure variables that provide direct measures of information asymmetry, suggests that the pecking order theory holds for the Korean stock market and that information asymmetry is a strong determinant of dividend policy decisions in an emerging market.

【 授权许可】

Unknown