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The incidence and persistence of dividend omissions by Spanish firms

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  • Andrew Benito

    ()
    (Banco de España)

Abstract

This paper examines the dividend policies of firms in Spain. Using firm-level panel data, models are estimated for dividend omissions as functions of financial characteristics, whilst also considering a role for persistence. The results are consistent with a tax discrimination model in which cash flow is the marginal source of funds. High degrees of persistence are also found in binary panel data models that control for unobservables and initial conditions. Whilst companies in Spain use the dividend to adjust the balance sheet, such persistence suggests this occurs slowly.

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File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/03/Fic/dt0303e.pdf
File Function: First version, April 2003
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Bibliographic Info

Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0303.

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Length: 46 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:bde:wpaper:0303

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Keywords: Dividends; financial pressure; discrete panel;

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