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

Research background: Corporate sustainability is currently one of the most popular issues in theoretical and empirical research. It generally focuses on identifying the relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP), although the CSP-CFP link is not investigated enough in the context of changes in dividend payments. Purpose of the article: The paper aims to identify the relationship between CSP and changes in dividend payouts. To do this, a research hypothesis was formulated, stating that improving CSP in environmental, social, governance, and economic dimensions increases the propensity to pay stable dividends. Methods: The main empirical research method is the panel logistic regression model, which includes variables of corporate sustainability. Additionally, descriptive statistics and the Pearson correlation coefficients are analyzed. The empirical research was conducted using data 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 of corporate sustainability are integrated in the long run, only the strong effectiveness of corporate systems and processes inside a company make board members maintain dividends at the previous levels. It means that the research hypothesis cannot be confirmed for all corporate sustainability dimensions considered together. The value added of the paper is that the authors considered the long-term returns pillar score as one of the independent variables, which is not a commonly used approach, although economic sustainability is a key corporate sustainability dimension.