Moderating role of corporate governance and ownership structure on the relationship of corporate sustainability performance and dividend policy

Abstract

The aim of this study is to investigate the influence of corporate governance and ownership structure on the relationship of corporate sustainability performance and dividend policy by using a panel dataset of 79 non-financial companies listed on Borsa Istanbul 100 Index for the years 2014–2020. We employed the panel logit, probit and tobit regression models for the analysis. The results indicate that corporate governance and family ownership significantly and positively moderate the relationship between corporate sustainability performance and dividend policy, while concentrated ownership and institutional ownership do not play a significant moderating role on this relationship. The findings also show that firm-level corporate governance is associated with high dividend payments, suggesting that this institutional mechanism helps reduce agency problems and lead companies to allocate capital more efficiently. The findings provide valuable insights for companies in structuring sustainability activities and shaping dividend policies with regard to ownership structure. It also offers policy prescriptions in emerging markets in the area of corporate financing policies.