National Culture, Firm Characteristics, and Dividend Policy

This study examines the joint impact of national culture and firm characteristics on dividend payouts by analyzing firms from 35 countries. We find that national culture, along with firm characteristics, such as sales growth, return on assets, and debt ratio, affects dividend payouts. More specifically, dividend payouts are less affected by firm characteristics in countries with a high uncertainty avoidance index compared with countries with a low uncertainty avoidance index. However, dividend payouts are more affected by firm characteristics in countries with high individualism compared with countries with low individualism. Our results support that national culture matters for dividend policy.