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Mark Bertus, John S. Jahera Jr., Keven Yost ORCID logo


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This paper empirically analyzes the impact of the Sarbanes-Oxley Act on the relation between measures of corporate governance and a firm’s dividend policy in the U.S. equity market. Using the IRRC database, we find that there is a statistically significant relation between governance measures and a firm’s dividend policy in the years prior to the introduction of the Sarbanes-Oxley Act. However, following Sarbanes-Oxley, the relation between a firm’s governance structure and dividend policy changes. In particular, shareholders’ rights and the proportion of outside directors are no longer significant in explaining a firm’s dividend policy.

Keywords: Sarbanes-Oxley, Agency Theory, Governance, Dividends

Authors’ individual contribution: Conceptualization – M.B., J.J., and K.Y.; Methodology – M.B. and J.J.; Investigation – M.B. and K.Y.; Data Curation – M.B. and K.Y.; Writing – M.B., J.J., and K.Y.

JEL Classification: G30, G32, G38

Received: 05.06.2019
Accepted: 07.11.2019
Published online: 11.11.2019

How to cite this paper: Bertus, M., Jahera, J. S., & Yost, K. (2019). Sarbanes-Oxley, corporate governance, and strategic dividend decisions. Corporate Ownership & Control, 17(1), 116-124.