National culture and dividend policy: International evidence from banking

We examine the relations between three dimensions of national culture and dividend policies of banks using a sample of banks from 51 countries over the period 1998–2007. In our main analysis, we employ three dimensions of Hofstede et al. (2010) and find that banks in high uncertainty avoidance, high long-term orientation and low masculinity countries pay lower amount of dividends and, are less likely to pay dividends. To confirm our main results, we also employ comparable three dimensions of national culture of House et al. (2004) and find that banks in high uncertainty avoidance, high future orientation and low assertiveness countries pay lower amount of dividends and, are less likely to pay dividends, findings confirming our above results. In sum, we find significant influence of the three dimensions of national culture on bank dividend policies.