Corporate Governance and Dividend Policy in Peru: Is there any link?

Abstract

The objective of the study is to analyze the impact of the adoption of the Corporate Governance Code over the dividend payout ratio in 111 companies listed on the Lima Stock Exchange (LSE) from 2007 to 2015. The chosen methodology includes an unbalanced panel data model with the dividend payout ratio as dependent variable and several independent variables such as the adoption of a Corporate Governance Code and the Corporate Gover-nance Quality. The results show that companies that have adopted a Corporate Governance Code and especially those with a high quality in it pay more dividends despite the fact that the dividend payout always presents a negative relation with the ownership concentration. However, these are overall results and more studies need to be carried out at the industry level to find out differences among them. This is the first study that establishes the relationship between corporate governance and dividend payout in companies operating in Peru. One important implication for institutional investors is that it is advisable to consider the adoption and the quality of the code as stock selection criteria in order to obtain a higher dividend payout from their investments. JEL Classification: G32, G35. Política de dividendos y buen gobierno corporativo en el Perú: ¿Existe alguna relación? Resumen El objetivo del estudio es analizar el impacto de la adopción del Código de Gobierno Corporativo sobre el pago de dividendos en 111 compañías listadas en la Bolsa de Valores de Lima del 2007 al 2015. La metodología escogida incluye un modelo de panel no balanceado, con el ratio de pago de dividendos como variable dependiente y entre las variables independientes la adopción del Código de Gobierno Corporativo y la Calidad del Gobierno Corporativo. Los resultados muestran que las compañías con un Código de Gobierno Corporativo y, especialmente, aquellas con una calidad superior del mismo, han pagado más