Creditor rights, culture and dividend payout policy

We study how creditor rights and culture interact with one another to influence corporatedividend payout policy. Where creditor rights are strong, creditors accept the status quo,which are large dividends in individualist and small dividends in collectivist traditions,respectively. Culture influences dividend payout where creditor rights are weak. In collec-tivist countries where group cohesion among corporate stakeholders results in perceivedlower agency costs of debt and equity, creditors place few if any restrictions on dividendpayout given weak creditor rights. In contrast, in individualist traditions, creditors continueto restrict dividend payouts under weak creditor rights. Our findings emphasize the impor-tance of accounting for the interactions between creditor rights and culture in determiningdividend policy