It has been found in the review that more attention needs to be given to the role
of governance in the life cycle theory of dividends. Corporate governance indicators change
with the life cycle stage of the firm and governance provisions are adopted based on firm
characteristics. Furthermore, culture and investor protection vary across countries and
their impact depends on firm life cycle. Thus, more flexible models should be designed to
capture the role of individual governance measures in the pay‐out policy based on firm
characteristics, national culture and investor protection under life cycle theory of
dividends.
