What drives the cash dividend policy of the poorly performing firms in Hong Kong?

Louis T.W. Cheng; Hung-Gay Fung; T. Y. Leung

doi:10.1142/S0219091508001386

Author(s)

Louis T.W. Cheng
Hung-Gay Fung
T. Y. Leung

Related Research Unit(s)

Department of Accountancy

Detail(s)

Original language	English
Pages (from-to)	347-361
Journal / Publication	Review of Pacific Basin Financial Markets and Policies
Volume	11
Issue number	3
Publication status	Published - 2008

Link(s)

DOI	DOI https://doi.org/10.1142/S0219091508001386 Final Published version
	Check@CityULib
Link to Scopus	https://www.scopus.com/record/display.uri?eid=2-s2.0-53249127175&origin=recordpage
Permanent Link	https://scholars.cityu.edu.hk/en/publications/publication(0c52b978-5d6c-47ff-a361-0b903fb9eb19).html

Abstract

We use financial data on poorly performing firms in Hong Kong to examine the motives behind paying out cash dividends when they suffer an earnings decline. We test three hypotheses behind the cash dividend policy: the maturity hypothesis, the free cash flow hypothesis, and the self-interest hypothesis of directors (i.e., the cash channeling hypothesis of directors). The findings are largely consistent with the maturity hypothesis and the free cash flow hypothesis but do not support the cash channeling hypothesis, confirming good market transparency and governance of the Hong Kong market. © 2008 World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research.

Research Area(s)

Cash dividends, Corporate governance, Maturity, Poor earnings

Citation Format(s)

[ RIS ] [ BibTeX ]

What drives the cash dividend policy of the poorly performing firms in Hong Kong? / Cheng, Louis T.W.; Fung, Hung-Gay; Leung, T. Y.

In: Review of Pacific Basin Financial Markets and Policies, Vol. 11, No. 3, 2008, p. 347-361.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review

Cheng, LTW, Fung, H-G & Leung, TY 2008, 'What drives the cash dividend policy of the poorly performing firms in Hong Kong?', Review of Pacific Basin Financial Markets and Policies, vol. 11, no. 3, pp. 347-361. https://doi.org/10.1142/S0219091508001386

Cheng, L. T. W., Fung, H-G., & Leung, T. Y. (2008). What drives the cash dividend policy of the poorly performing firms in Hong Kong? Review of Pacific Basin Financial Markets and Policies, 11(3), 347-361. https://doi.org/10.1142/S0219091508001386

Cheng LTW, Fung H-G, Leung TY. What drives the cash dividend policy of the poorly performing firms in Hong Kong? Review of Pacific Basin Financial Markets and Policies. 2008;11(3):347-361. doi: 10.1142/S0219091508001386

Cheng, Louis T.W. ; Fung, Hung-Gay ; Leung, T. Y. / What drives the cash dividend policy of the poorly performing firms in Hong Kong?. In: Review of Pacific Basin Financial Markets and Policies. 2008 ; Vol. 11, No. 3. pp. 347-361.