Authors: Andreas Andrikopoulos, Anna Giannopoulou Merika, Henry Penikas

Title: The determinants of dividend policy in shipping companies

Abstract

We explore the factors that shape the probability and magnitude of dividend payouts in listed shipping companies. Our rationale relies on corporate governance and agency-theoretic arguments of payout policy. The data set spans the 2011-2021 period, containing 259 shipping companies and 2849 firm-year observations. The econometric analysis is based on a Heckman model that jointly assesses the probability and the magnitude of dividend payouts. The Heckman model consists of two equations of dividend payout determinants, a response equation and a selection one. Our econometric results indicate that the dividend policy of listed shipping companies is shaped by well-established corporate-finance and corporate-governance characteristics such as firm size, profitability, board size and internal audit. Moreover, we discover that dividend policy is sensitive to industry-specific features, with companies associated with dry-bulk and container shipping being more likely to distribute dividends to their shareholders. Our findings yield important implications for shipping professionals who can associate dividend policy with the content of agency conflicts, market regulators who can assess the effect of corporate governance on payouts to shareholders and economic theorists who can explore evidence on dividend payouts in an industry with varying and particular tax regime.