Export impact on dividend policy for big Colombian exporting firms, 2006-2014

Arbeitspapier

This paper studies the impact of exogenous export demand shocks on firms' dividend policy using firm specific real exchange rate variation as instrumental variable. IV exclusion restriction is plausibly satisfied because real exchange rate shocks were unanticipated -partly explained because of international oil price fluctuation-, and first stage results confirm relevance condition fulfillment. The results indicate that big private Colombian exporting firms decree dividends as a way to mitigate the agency cost generated by exogeneous exports variation via higher free cash flow and cash flow volatility, especially in poor managerial quality firms. Evidence supports agency cost theory and denies signaling.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 2243

Classification and Topics

• Classification: Wirtschaft ; Empirical Studies of Trade ; Trade: General ; Corporate Finance and Governance: General ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Information and Market Efficiency; Event Studies; Insider Trading ; Payout Policy
• Subject: dividends ; exports ; agency cost ; free cash flow ; volatility

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Merchan Alvarez, Federico Alberto
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW Kiel)
• (where): Kiel
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/271029
• Last update: 10.03.2025, 11:45 AM CET