Investigating the Mediating Role of Dividend Policy on the Relationship Between Corporate Governance and Free Cash Flow

in the theoretical literature based on normal theory, dividend policy as a mediator is the intermediary between corporate governance and free cash flow. This requires empirical testing for users to confirm the mediating role of dividend policy. Accordingly, the purpose of the present study is to test the Sobel test to examine the mediating role of dividend policy on the relationship between corporate governance and free cash flow. The statistical population of this study includes all companies listed in Tehran Stock Exchange. The timeframe for doing the research is from 2011 to 2018. The sample size is 94 companies based on the systematic elimination method. The research method is based on hybrid data and multivariate least squares regression model using Sobel test. Evidence suggests that the mediating role of dividend policy has a significant effect on the relationship between corporate governance and free cash flow, meaning that because of the importance of dividend policy and corporate governance mechanisms with free cash flow, intermediary role The total dividend policy has a minor effect on free cash flow because not all interpretations are absorbed by corporate governance mechanisms.