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Changes in dividend smoothing after the financial crisis

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  • Rhee, KyungJae
  • Park, Kyung Suh

Abstract

This study examines changes in dividend smoothing among Korean firms after the financial crisis in 2008, and analyzes the factors influencing those changes. We find that the speed of adjustment of firms after the crisis has increased above pre-crisis levels, indicating that firms focus more on investments and the appropriate level of cash facing increased corporate risk, while such tendency is stronger for small firms with higher investment levels.

Suggested Citation

  • Rhee, KyungJae & Park, Kyung Suh, 2018. "Changes in dividend smoothing after the financial crisis," Economics Letters, Elsevier, vol. 172(C), pages 37-39.
    • Handle: RePEc:eee:ecolet:v:172:y:2018:i:c:p:37-39
    DOI: 10.1016/j.econlet.2018.08.019
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    References listed on IDEAS

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    1. Peterson, Pamela P. & Benesh, Gary A., 1983. "A Reexamination of the Empirical Relationship between Investment and Financing Decisions," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 18(4), pages 439-453, December.
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    3. Mark T. Leary & Roni Michaely, 2011. "Determinants of Dividend Smoothing: Empirical Evidence," The Review of Financial Studies, Society for Financial Studies, vol. 24(10), pages 3197-3249.
    4. Fama, Eugene F, 1974. "The Empirical Relationships Between the Dividend and Investment Decisions of Firms," American Economic Review, American Economic Association, vol. 64(3), pages 304-318, June.
    5. Roni Michaely & Michael R. Roberts, 2012. "Corporate Dividend Policies: Lessons from Private Firms," The Review of Financial Studies, Society for Financial Studies, vol. 25(3), pages 711-746.
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    7. Alli, Kasim L & Khan, A Qayyum & Ramirez, Gabriel G, 1993. "Determinants of Corporate Dividend Policy: A Factorial Analysis," The Financial Review, Eastern Finance Association, vol. 28(4), pages 523-547, November.
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    Cited by:

    1. Vera Ivanyuk, 2023. "Development of an Econometric Model of Crisis and Assessment of the Crisis Risk," Mathematics, MDPI, vol. 11(22), pages 1-29, November.
    2. Ed-Dafali, Slimane & Patel, Ritesh & Iqbal, Najaf, 2023. "A bibliometric review of dividend policy literature," Research in International Business and Finance, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Financial crisis; Dividend smoothing; Speed of adjustment; Dividend residual theory;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G01 - Financial Economics - - General - - - Financial Crises
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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