Corporate Payout Policy in Japan
AbstractThis paper examines cash dividends and share repurchases in Japan - discerning between keiretsu and non-keiretsu groupings of firms - during the period 1990 to 2008, a period of extensive Japanese corporate governance reform. As in the United States, share repurchases in Japan have grown strikingly across firm groupings even relative to cash dividends which have also increased. Unlike in the United States, cash dividends remain the dominant form of payout across the groupings of firms in Japan. Despite extensive corporate governance reform, the keiretsu grouping of firms exhibits a comparative reticence to alter its corporate payout policy. In particular, it remains the case that keiretsu firms disburse relatively large amounts of cash, they rely relatively heavily on cash dividends rather than share repurchases, they exhibit a greater tendency to discontinue cash dividend payouts, their payouts are relatively sensitive to earnings and these payouts respond relatively rapidly with respect to earnings. In addition, the cash dividend payouts in keiretsu firms have been relatively concentrated, while these payouts from non-keiretsu firms concentrate increasingly over time. The findings also suggest that larger firms in Japan are more likely to payout and if they decide to do so they tend to payout more. As the level of concentration of ownership in Japanese firms increases the amount of cash dividends disbursed decreases. Privatized firms are more likely to pay cash dividends and if they decide to do so and they are not keiretsu affiliated they tend to payout more.
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Bibliographic InfoPaper provided by Geary Institute, University College Dublin in its series Working Papers with number 201105.
Length: 38 pages
Date of creation: 02 Mar 2011
Date of revision:
Payout policy; dividends; share repurchases; corporate governance;
Find related papers by JEL classification:
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
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