Economic Policy Uncertainty and Corporate Dividend: Does the Presence of Government Shareholders Play a Role?

Abstract

This article examines the effect of economic policy uncertainty (EPU) on the dividend policies of Vietnamese listed firms moderated by the role of government shareholders. A wide range of control variables and different regression methods are used to ensure the reliability of the results. We find that firms distribute more cash to shareholders under increased EPU. Notably, the presence of the government shareholder reduces the effect of EPU on dividends. Further analyses indicate that firms with state ownership cut dividends for increasing capital expenditures rather than other purposes such as cash hoarding, debt reduction, inventory expansion, or dealing with declined profits. This article enhances the understanding about the connection between government ownership, EPU, and dividend policy.