Impact of Corruption on Corporate Payout Policy: Evidence from selected MENA Countries

The purpose of this study is to examine the impact of corruption on payout policy in light of the agency theory in seven selected MENA countries. The main dataset used in the analysis is up to 5,684 firm– year observations for 435 non-financial firms listed on the stock exchanges of the seven MENA countries for 20 years (2002-2021). This study uses regression models as logistic regression and weighted least square (WLS). The study finds that perceived corruption is positively related to both the decision to pay dividends and the payout ratio. These findings imply that when corruption is more severe, firms are more likely to distribute dividends and, the payout ratios tend to be higher. To the best of the Author’s knowledge, this is a first attempt to test the influence of corruption on corporate pay out policy within the context of the MENA region.