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Do Senior Citizens Prefer Dividends? Local Clienteles vs. Firm Characteristics

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  • Krieger, Kevin
  • Lee, Bong-Soo
  • Mauck, Nathan

Abstract

We examine the payout policy of U.S. firms over the period 1980-2008. Prior research indicates that firm characteristics, managerial preferences, and investor clienteles are all important factors in setting payout policy. Counter to the oft-reported positive relation between senior citizens and the use of dividends, our results indicate that senior citizens are either indifferent between dividends and repurchases or demand dividends and have no influence over firm policy. The evolution of firm characteristics, including the average firm size, age, and volatility of earnings over time best explains payout policy. Further, manager preference for flexibility drives the payout decision. JEL

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41784.

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Date of creation: 05 Oct 2012
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Handle: RePEc:pra:mprapa:41784

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Keywords: Payout Policy; Clientele Effect;

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