코로나19가 기업배당에 미친 영향: 기업규모와 현금보유를 중심으로

The Impact of COVID-19 on Corporate Dividends: Focusing on Firm Size and Cash Holdings

Purpose - This study aims to investigate whether COVID-19 affected a firm’s dividend policy by focusing on firm size and cash holdings. First, did larger firms behave differently in dividend payouts compared to smaller firms during the pandemic? Second, did firms with more cash holdings pay higher dividends than those with fewer cash reserves during the crisis? Design/Methodology/Approach - Constructing a panel dataset of listed firms in the Korean stock market from 2018 to 2021, we perform the difference-in-differences (DID) method and difference-in-difference-in-differences (DDD) method. Findings - First, larger firms, which tend to be less financially constrained, paid higher dividends than smaller firms during the COVID-19 crisis. Second, interestingly, cash-rich firms cut dividends more than cash-poor firms during the pandemic. Finally, we observe this negative relationship between cash holdings and dividends in larger firms; specifically, larger firms with higher cash reserves reduced dividends more during the pandemic. Research Implications - Our findings emphasize that firm size and cash holdings played an important role in determining a firm’s dividend policy during the pandemic. Interestingly, larger firms with sufficient cash paid fewer dividends during this period. This result suggests that these firms may have agency problems, such as tunneling, particularly as they were more likely to benefit from the flight to quality by investors during the crisis.