Effect of Corporate Social Responsibility Investment on Dividend Policy: Evidence From Thailand / Pinhathai Thongprasert
26 leaves: tables
Using sample of 257 firm year observations between 2008 to 2017 from companies listed in the Stock Exchange of Thailand, this study examines how firm’s investment in corporate social responsibility (“CSR”) impacts its dividend policy. Following Benlemlih, (2018), using dividend to sales as dividend policy measurement we find consistent positive but insignificant relationship between CSR and dividend policy. Thus, the study alters dividend measurement to dividend yield and empirical result suggests high CSR firm tends to significantly pay more dividend than low CSR firm. Additionally, analysis on level of dividend distribution of high CSR firm comparing to low CSR firm also suggests level of dividend distributed by high CSR firm is greater than level of low CSR firm. As theoretical prediction, dividend distribution by shareholders at the end of period is served as tool to control or mitigate owner-manager conflicts related to overinvestment in CSR by management during the period.