Subjects such as public finance, corporate finance, banking theory, risk management and management accounting are all largely based on the neoclassical approach. Most recent appointed professors have started their work with ideas based on a neoclassical fundament and its methodological preferences. Neoclassical economic thinking is not bad in itself. It has brought much good, even. However, now the downside of neoclassical theory has occurred. Failing financial markets have plunged the global economy into crisis. It is, therefore, high time for a debate on economic concepts as taught in universities and business schools. Are students really trained to think critically about economic theory and the consequences when economic theories are put into practice?
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Frank Jan de Graaf argues that the domination of neoclassical economic thinking in academia has contributed to the economic crisis and hindered thinking about sustainable development. Currently, ethics is re-entering the debate about how to develop prosperous open societies. A group of NGOs recently came up with an interesting alternative perspective on economics and social development. Their thinking could enrich mainstream economics.Verschenen in de Working papers series.
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This research conducts a meticulous examination of the determinants influencing dividend payout dynamics among firms listed on the Korean Stock Exchange (KSE) from 1995 to 2021, a period characterized by profound economic fluctuations. By leveraging a dynamic panel data model and the Generalized Method of Moments (GMM) for estimation, the study addresses endogeneity concerns while exploring the effects of firm-specific and macroeconomic variables on dividend yields. The investigation delineates three distinct economic phases: normal conditions, financial crises, and the aggregate study period, facilitating a granular understanding of firms’ dividend payout adaptability under varying economic landscapes. Empirical findings underscore the persistence of dividend payments, revealing a variable adjustment speed toward target dividend yields contingent upon the economic context, with an expedited adjustment observed during crises. Crucially, firm profitability emerges as a consistent determinant of dividend yields across all examined periods, whereas the influence of macroeconomic variables is notably more pronounced during periods of economic normalcy. This research elucidates the complex interplay between internal corporate strategies and external economic pressures in shaping dividend policies, thereby enriching the discourse on dividend payout behavior in the context of Korea’s economic evolution from an emerging to a developed market.
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