Author(s): Yousef Abu Siam, Abu Reza Islam, Mahmoud Nassar, Mohammad Jebreel, Hamed ALMahadin
This study examined to what extent corporate social responsibility (CSR) affected dividend policy and the role firm size played as a moderator for firms in an emerging market. It used a sample of 265 industrial firms that were listed on Amman Stock Exchange during the period 2010–2016. Regression results indicate that greater is the number of CSR activities & engagements, lesser becomes the propensity to pay dividends by firms on average. The study found that firm size played an important role affecting the relationship between CSR activities and dividend policy. However, the relationship between CSR and dividend policy in this study (in an emerging market) is found to be different from those of the developed markets. This study points out that the trade-off between firms’ CSR activities and dividend policy must address the concerns of the investors, minority shareholders and policy makers for policy reform initiatives to strengthen the protection of other stakeholders’ interests.