Purpose The purpose of this study is to examine the agency problem of expropriation using dividends in politically connected firms and the relevance of institutional investors in limiting this problem. The growing presence of this group of shareholders offers a unique opportunity to test their...

This study examines the agency problem of expropriation using dividends in politically connected firms and the relevance of institutional investors in limiting this problem. Our results suggest that politically connected firms (PCON) have a preference to pay lower dividends whereas institutional...