Effect of corporate sustainability performance on the changes in payout policy of the top global companies
Effect of corporate sustainability performance on the changes in payout policy of the top global companies

Summary/Abstract: Research background: Corporate sustainability is currently one of the most popular issues intheoretical and empirical research. It generally focuses on identifying the relationship betweencorporate sustainability performance (CSP) and corporate financial performance (CFP), alt-hough the CSP-CFP link is not investigated enough in the context of changes in dividendpayments.Purpose of the article: The paper aims to identify the relationship between CSP and changesin dividend payouts. To do this, a research hypothesis was formulated, stating that improvingCSP in environmental, social, governance, and economic dimensions increases the propensityto pay stable dividends. Methods: The main empirical research method is the panel logistic regression model, whichincludes variables of corporate sustainability. Additionally, descriptive statistics and thePearson correlation coefficients are analyzed. The empirical research was conducted usingdata on the top global companies listed in the Global 500 of 2021 from the period of 2011–2021.All required data were retrieved from the Refinitiv (Thomson Reuters) Eikon database.Findings & Value added: The main conclusion of the paper is that when all dimensions ofcorporate sustainability are integrated in the long run, only the strong effectiveness of corpo-rate systems and processes inside a company make board members maintain dividends at theprevious levels. It means that the research hypothesis cannot be confirmed for all corporatesustainability dimensions considered together. The value added of the paper is that the au-thors considered the long-term returns pillar score as one of the independent variables, whichis not a commonly used approach, although economic sustainability is a key corporate sus-tainability dimension.

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