The CSR-threshold effect on dividend payout policy: insights from MENA region

Purpose The purpose of this study is to examine the nonlinear relationship between corporate social responsibility (CSR) and dividend policy in the MENA context. This study specifically investigates whether the level of CSR matters in the CSR–dividend payout nexus. Design/methodology/approach This study is based on a sample of 156 non-financial firms over the period from 2011 to 2021. A dynamic panel threshold model is adopted to investigate the nonlinear relationship between CSR and dividend payout. Findings The authors find a nonlinear association between CSR and dividend payout policy. More precisely, results show a positive impact of CSR on dividend policy below a certain threshold. This becomes negative above the threshold value. A set of robustness checks confirms the existence of a nonlinear impact of CSR on dividend payout. Research limitations/implications The findings of this study help investors, shareholders and policymakers better account for nonlinearity and offer new insights for managing the impact of CSR on dividend payout policy. Originality/value Although little previous research has focused on the CSR–dividend payout nexus, to the best of authors’ knowledge, the authors believe that this is the first study to examine the nonlinear influence of CSR on dividend policy using a dynamic panel threshold model in the MENA context.