Dividend behavior and ESG reporting in GCC publicly listed firms

The study examines the association between voluntary ESG reporting, dividend behavior, growth performance, and the liquidity of shares of publicly listed companies (PLCs) traded on the Gulf Corporation Council (GCC) capital markets. The sample consists of 188 PLCs trading on the GCC stock exchanges over the period 2012-2021. The life cycle theory of dividends and dividend signaling theory are used to develop five hypotheses. The findings show that after controlling dividend smoothing, voluntary ESG reporting, sukuk bond issuance, and risk factors influence the dividend behaviors of GCC PLCs. Additionally, share turnover is not associated with the dividend per share but it is significantly associated with the growth proxy Tobin’s Q. The study's findings contribute to understanding the GCC capital markets and their PLCs’ dividend behaviors, which are explained from the perspective of protecting minority shareholders by improving corporate governance.