What Tells the Timing of Dividend Payment to Shareholders? The Case of French Companies

Abstract

Purpose: This paper aims to extend and contributes to prior French research on the determinants of the timing of dividend payment. It seeks to investigate the impact of ownership structure, duality of the manager as chairman and president of the board, liquidity, size and growth opportunities, profitability, variation of the amount of dividend on the real timing of dividend payment.

Design/methodology/approach: Using a panel of French listed firms from 2003 to 2008, the paper uses a cox regression to investigate the relationship between the corporate determinants and the timing of dividend payment.

Finding: The paper finds that large shareholders influence the timing of dividend payment but there is no significant relationship between the duality of the manager and the fixing of the dividend payment. The finding is consistent with agency theory since rapid dividend payment can be employed for mitigating agency conflict as timing of dividend payment can be substituted for shareholder monitoring. Further, the empirical results reveal that Cox regression is more appropriate in explaining the duration of dividend payment with variables associated to corporate governance and ownership structure.

Originality/value: The paper contributes to prior research related to the timing of dividend payment by being the first French study to examine the determinants of the timing of dividend payment for listed companies in CAC 40.