<i>R</i>-Squared and Dividend Payout: Evidence from the Korean Market

The authors investigate <i>R</i>² and its relationship with dividend payouts in the Korean stock market. <i>R</i>² is derived from the market model regression. Their results are consistent with the previous literature on corporate governance and dividend payouts: they find that <i>R</i>² is higher for business group <i>(chaebol)</i> firms and that there is a negative relationship between <i>R</i>² and dividend payout. However, the relationship is not stronger for the business group firms than for the non-business group firms. The findings elucidate the relationship between <i>R</i>² and dividend payout policy in the United States.