THE IMPACT OF CORPORATE GOVERNANCE ON DIVIDEND POLICY: EMPIRICAL EVIDENCE FROM TUNISIAN LISTED COMPANIES

Abstract

Corporate governance has emerged as a central determinant of financial policy, influencing not only strategic decision-making but also firms’ approaches to dividend distribution. Dividend policy represents a critical choice between profit retention and shareholder remuneration, carrying implications for signaling, agency costs, and stakeholder protection. While international studies highlight diverse and sometimes contradictory links between governance and payouts, evidence from North African markets remains limited. This study investigates the impact of corporate governance mechanisms on dividend policy among Tunisian listed companies. The primary aim is to determine whether board characteristics, ownership structures, and monitoring bodies significantly shape dividend decisions, or whether such policies are largely explained by financial and macroeconomic conditions. A balanced panel dataset of 30 non-financial firms listed on the Tunisian Stock Exchange over the period 2015–2024 (300 firm-year observations) is employed. Static panel estimation methods are used, with both fixed- and random-effects specifications assessed. The Hausman test supports the use of fixed-effects estimators, while multicollinearity diagnostics confirm the robustness of results.The findings reveal that board independence, CEO duality, ownership concentration, and profitability (ROA) are positively and significantly associated with dividend payouts. In contrast, audit committee size, managerial ownership, leverage, and inflation exert negative effects, highlighting the constraining roles of insider control, debt commitments, and macroeconomic pressures. Other governance attributes, including board size, gender diversity, and firm size, show no significant impact. The study concludes that dividend policy in Tunisia is simultaneously governance- and constraint-driven, reflecting the interaction of monitoring structures, insider incentives, and financial conditions. These results contribute to the broader literature by demonstrating that governance quality and structural ownership arrangements decisively shape payout outcomes in emerging markets. From a policy perspective, strengthening independent oversight and fostering transparency in ownership could enhance dividend discipline and investor confidence. Future research may compare these findings with other emerging economies or explore dynamic models of payout adjustment.