Impact of Internal and External Information Shocks on the Value Relevance of Dividend Policy

In this paper, the effect of internal and external information shocks on the value relevance of dividend policy is examined by considering the information asymmetry, which is one of the indicators of the information environment. It is argued that managers act on the information they have so that they maximize their profits at the expense of uninformed groups. In this way, managers adopt dividend policies by creating information shocks caused by asymmetry. To achieve the research goal, the data of 90 sample companies were collected for the period of 2012-2018 and analyzed by a descriptive-correlation approach using multiple regression and Wong tests. The findings showed that, among the internal information shock (fundamental changes in the institutional ownership and fundamental changes of the board of directors) and external shock, the internal information shock of fundamental changes in institutional ownership had more value relevance with the dividend policy, compared with two other information variables.