Related party transactions and dividend payouts
Finance Research Letters
This paper examines the association between Related Party Transactions (RPTs) and dividend payouts. Using a sample drawn from the S&P 1,500 firms and hand collected RPTs data between 2011 and 2018, we find that the magnitude of RPTs, measured by the number of transactions, is positively associated with the dividend yield. Additionally, we find that this relationship is mainly driven by RPTs that are classified as less opportunistic by prior studies. Our findings suggest that, when the magnitude of RPTs increases, firms tend to increase dividends to mitigate agency conflicts as agency problems become more prevalent.
Moataz El-Helaly, Bilal Al-Dah, Related party transactions and dividend payouts, Finance Research Letters, Volume 49, 2022, 103114, ISSN 1544-6123, https://doi.org/10.1016/j.frl.2022.103114