The Dividend Policy of German Firms

This file is part of IDEAS, which uses RePEc data

The Dividend Policy of German Firms

Author Info

Andres, C.
Betzer, A.
Goergen, M.
Renneboog, L.D.R. (Tilburg University, Center for Economic Research)

Additional information is available for the following registered author(s):

Luc Renneboog

Abstract

German firms pay out a lower proportion of their cash flows, but a higher proportion of their published profits than UK and US firms. We estimate partial adjustment models and report two major findings. First, German firms base their dividend decisions on cash flows rather than published earnings as (i)published earnings do not correctly reflect performance because German firms retain parts of their earnings to build up legal reserves, (ii) German accounting is conservative, (iii) published earnings are subject to more smoothing than cash flows. Second, to the opposite of UK and US firms, German firms have more flexible dividend policies as they are willing to cut the dividend when profitability is only temporarily down.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

Publisher Info
Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2008-67.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 2008
Date of revision:
Handle: RePEc:dgr:kubcen:200867

Contact details of provider:
Web page: http://center.uvt.nl

For technical questions regarding this item, or to correct its listing, contact: (Corry Stuyts).

Related research
Keywords:

Other versions of this item:

Paper
- Andres, C. & Betzer, A. & Goergen, M. & Renneboog, L.D.R., 2008. "The Dividend Policy of German Firms," Discussion Paper 2008-027, Tilburg University, Tilburg Law and Economic Center.

Find related papers by JEL classification:
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-01-31 (All new papers)
NEP-BEC-2009-01-31 (Business Economics)

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.:

Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 277-97, April. [Downloadable!] (restricted)
Fama, Eugene F. & French, Kenneth R., 2001. "Disappearing dividends: changing firm characteristics or lower propensity to pay?," Journal of Financial Economics, Elsevier, vol. 60(1), pages 3-43, April. [Downloadable!] (restricted)
Other versions:
- Eugene F. Fama & Kenneth R. French, . "Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay?."," CRSP working papers 509, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- 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. [Downloadable!] (restricted)
Franks, Julian & Mayer, Colin, 2001. "Ownership and Control of German Corporations," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 14(4), pages 943-77.
Other versions:
- Julian Franks & Colin Mayer, 2001. "Ownership and Control of German Corporations," OFRC Working Papers Series 2001fe11, Oxford Financial Research Centre. [Downloadable!]
- Franks, Julian R & Mayer, Colin, 2001. "Ownership and Control of German Corporations," CEPR Discussion Papers 2898, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Mayer, Colin & Alexander, Ian, 1990. "Banks and securities markets: Corporate financing in Germany and the United Kingdom," Journal of the Japanese and International Economies, Elsevier, vol. 4(4), pages 450-475, December. [Downloadable!] (restricted)
Renneboog, L.D.R. & Trojanowski, Grzegorz, 2005. "Control structures and payout policy," Discussion Paper 61, Tilburg University, Center for Economic Research. [Downloadable!]
Other versions:
- Renneboog, L.D.R. & Trojanowski, G., 2005. "Control structures and payout policy," Discussion Paper 14, Tilburg University, Tilburg Law and Economic Center. [Downloadable!]
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. [Downloadable!] (restricted)
Benzinho, José, 2004. "The dividend policy of the Portuguese corporations: Evidence from Euronext Lisbon," MPRA Paper 1137, University Library of Munich, Germany. [Downloadable!]
Goergen, Marc & Renneboog, Luc & Correia da Silva, Luis, 2005. "When do German firms change their dividends?," Journal of Corporate Finance, Elsevier, vol. 11(1-2), pages 375-399, March. [Downloadable!] (restricted)
Other versions:
- Correia da Silva, L. & Goergen, M. & Renneboog, L.D.R., 2002. "When do German firms change their dividends?," Discussion Paper 56, Tilburg University, Center for Economic Research. [Downloadable!]
Aivazian, Varouj A. & Booth, Laurence & Cleary, Sean, 2006. "Dividend Smoothing and Debt Ratings," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 41(02), pages 439-453, June. [Downloadable!]
McDonald, John G. & Jacquillat, Bertrand & Nussenbaum, Maurice, 1975. "Dividend, Investment and Financing Decisions: Empirical Evidence on French Firms," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 10(05), pages 741-755, December. [Downloadable!]
Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August. [Downloadable!] (restricted)
Other versions:
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford. [Downloadable!]
Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November. [Downloadable!] (restricted)
DeAngelo, Harry & DeAngelo, Linda & Skinner, Douglas J., 2004. "Are dividends disappearing? Dividend concentration and the consolidation of earnings," Journal of Financial Economics, Elsevier, vol. 72(3), pages 425-456, June. [Downloadable!] (restricted)

Full references

Statistics
Access and download statistics

Did you know? The yearly budget of IDEAS is exactly $0: it relies entirely on volunteer work.

This page was last updated on 2009-11-25.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.