Does Information Asymmetry Affect Dividend Policy? Analysis Using Market Microstructure Variables

This study analyzes the relationship between information asymmetry and dividend policy in an emerging market, Korea. We adopt several proxies for asymmetry, such as Glosten–Harris Hasbrouk–Foster–Viswanathan models, drawn from market microstructure literature. finds a negative yields, which appears to be particularly strong when firms have difficulty raising external capital because they high systematic risk, financial constraints, or low stock liquidity. result, based on analysis using variables that provide direct measures of suggests pecking order theory holds Korean is determinant decisions market.