Corporate governance, financial constraints, and dividend policy: Evidence from Pakistan

Information asymmetry between insiders and outsiders creates various issues for a firm, such as the agency problem where managers pursue their own interests even at cost of well-being firm’s shareholders, probable external financial constraints investors discount risk by causing surge in financing. Normally, firm manages financing omitting or initiating dividend payments. Therefore, this study investigated impact corporate governance on policies presence using sample 139 non-financial firms listed PSE, weak regulatory framework generates problems underdevelopment sector causes businesses. The results reveal that, Pakistan, dividends are an Outcome practices. As quality firm-level improves, shareholders provided with legal strength to ultimately force pay dividends. Along problem, availability is important factor related payment decisions Pakistan. When company confronted simultaneously, try avoid costly rather than reducing agency’s problem. can be further refined enhancing period size. Furthermore, work extended classifying subjects nature industry group ownership.