Advanced Search
MyIDEAS: Login to save this article or follow this journal

Dividends and politics

Contents:

Author Info

  • Bank, Steven
  • Cheffins, Brian
  • Goergen, Marc

Abstract

This paper contributes to a growing literature on politics and corporate governance by providing an empirical analysis of the impact of political factors on dividend payouts. The focus is on the determinants of dividend policy in U.K. public companies between 1949 and 2002. We augment Lintner's [Lintner, J., 1956. Distribution of incomes of corporations among dividends, retained earnings, and taxes. American Economic Review 46, 97-113.] partial adjustment model by including measures of politics and test the model using aggregate annual dividends and earnings data. We find neither the political placement of the party in power nor regulations explicitly designed to regulate corporate behaviour correlate in the direction political theories of corporate governance would predict.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6V97-4VDY7TW-1/2/2a7210eba7619a6d0d66b952bdd48f89
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 25 (2009)
Issue (Month): 2 (June)
Pages: 208-224

as in new window
Handle: RePEc:eee:poleco:v:25:y:2009:i:2:p:208-224

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505544

Related research

Keywords: Corporate governance Dividend policy Politics Tax rules Dividend controls;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Benito, Andrew & Garry Young, 2002. "Hard Times or Greatr Expectations?: Dividend Omissions and Dividend Cuts by UK Firms," Royal Economic Society Annual Conference 2002 21, Royal Economic Society.
  2. Jean Crockett & Irwin Friend, . "Dividend Policy in Perspective: Can Theory Explain Behavior? (Revision of 30-86)," Rodney L. White Center for Financial Research Working Papers 4-88, Wharton School Rodney L. White Center for Financial Research.
  3. Crockett, Jean A & Friend, Irwin, 1988. "Dividend Policy in Perspective: Can Theory Explain Behavior?," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 603-13, November.
  4. Briston, R J & Tomkins, C R, 1970. "The Impact of the Introduction of Corporation Tax upon the Dividend Policies of United Kingdom Companies," Economic Journal, Royal Economic Society, vol. 80(319), pages 617-37, September.
  5. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
  6. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 2000. "Agency Problems and Dividend Policies around the World," Journal of Finance, American Finance Association, vol. 55(1), pages 1-33, 02.
  7. Smith, Clifford Jr. & Watts, Ross L., 1992. "The investment opportunity set and corporate financing, dividend, and compensation policies," Journal of Financial Economics, Elsevier, vol. 32(3), pages 263-292, December.
  8. Stephen P. Ferris & Nilanjan Sen & Ho Pei Yui, 2006. "God Save the Queen and Her Dividends: Corporate Payouts in the United Kingdom," The Journal of Business, University of Chicago Press, vol. 79(3), pages 1149-1174, May.
  9. Marco Pagano & Paolo F. Volpin, 2005. "The Political Economy of Corporate Governance," American Economic Review, American Economic Association, vol. 95(4), pages 1005-1030, September.
  10. King, M A, 1972. "Corporate Taxation and Dividend Behaviour: A further Comment," Review of Economic Studies, Wiley Blackwell, vol. 39(2), pages 231-34, April.
  11. James M. Poterba & Lawrence H. Summers, 1985. "The Economic Effects of Dividend Taxation," NBER Working Papers 1353, National Bureau of Economic Research, Inc.
  12. Eugene F. Fama & Kenneth R. French, 2001. "Disappearing Dividends: Changing Firm Characteristics Or Lower Propensity To Pay?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(1), pages 67-79.
  13. Machin, S.J., 1991. "Unions and the capture of economic rents: An investigation using british firm level data," International Journal of Industrial Organization, Elsevier, vol. 9(2), pages 261-274, June.
  14. von Eije, Henk & Megginson, William L., 2008. "Dividends and share repurchases in the European Union," Journal of Financial Economics, Elsevier, vol. 89(2), pages 347-374, August.
  15. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-29, May.
  16. Jean Crockett & Irwin Friend, . "Dividend Policy in Perspective: Can Theory Explain Behavior? (Revision of 30-86)," Rodney L. White Center for Financial Research Working Papers 04-88, Wharton School Rodney L. White Center for Financial Research.
  17. Short, Helen & Zhang, Hao & Keasey, Kevin, 2002. "The link between dividend policy and institutional ownership," Journal of Corporate Finance, Elsevier, vol. 8(2), pages 105-122, March.
  18. P. Raghavendra Rau & Theo Vermaelen, 2002. "Regulation, Taxes, and Share Repurchases in the United Kingdom," The Journal of Business, University of Chicago Press, vol. 75(2), pages 245-282, April.
  19. Renneboog, L.D.R. & Trojanowski, G., 2005. "Patterns in Payout Policy and Payout Channel Choice of UK Firms in the 1990s," Discussion Paper 2005-22, Tilburg University, Center for Economic Research.
  20. Denis, David J. & Osobov, Igor, 2008. "Why do firms pay dividends? International evidence on the determinants of dividend policy," Journal of Financial Economics, Elsevier, vol. 89(1), pages 62-82, July.
  21. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411.
  22. Feldstein, Martin S, 1970. "Corporate Taxation and Dividend Behaviour," Review of Economic Studies, Wiley Blackwell, vol. 37(1), pages 57-72, January.
  23. Easterbrook, Frank H, 1984. "Two Agency-Cost Explanations of Dividends," American Economic Review, American Economic Association, vol. 74(4), pages 650-59, September.
  24. Machin, Stephen J & Stewart, Mark B, 1990. "Unions and the Financial Performance of British Private Sector Establishments," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(4), pages 327-50, Oct.-Dec..
  25. Randall Morck & Bernard Yeung, 2005. "Dividend Taxation and Corporate Governance," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 163-180, Summer.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Renneboog, L.D.R. & Trojanowski, G., 2005. "Patterns in Payout Policy and Payout Channel Choice of UK Firms in the 1990s," Discussion Paper 2005-002, Tilburg University, Tilburg Law and Economic Center.
  2. Steven Bank & Brian Cheffins & Marc Goergen, 2007. "Does Dividend Policy Have a Political Dimension? The British Case," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 5(1), pages 33-37, 05.
  3. Renneboog, Luc & Trojanowski, Grzegorz, 2011. "Patterns in payout policy and payout channel choice," Journal of Banking & Finance, Elsevier, vol. 35(6), pages 1477-1490, June.
  4. Felix Arnold, 2013. "German MPs' Outside Jobs and Their Repercussions on Parliamentary Effort," Discussion Papers of DIW Berlin 1340, DIW Berlin, German Institute for Economic Research.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:25:y:2009:i:2:p:208-224. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.