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Investor communication and payout policy: a field experiment

Author

Listed:
  • Xiaoqiao Wang
  • Jing Xie
  • Bohui Zhang
  • Xiaofeng Zhao

Abstract

We conduct a field experiment to examine whether brief, unsolicited messages can influence corporate dividend policies. Messages highlighting investor concerns rooted in four dividend theories were sent to publicly listed firms. We find that messages framed around agency concerns significantly increase dividend payouts among past payers, particularly those with weaker governance. This effect is robust across alternative specifications and validated by a post-experiment survey. In contrast, messages based on bird-in-hand, signaling, or tax-clientele theories have no significant impact. Our findings suggest that dividend policy is more malleable than traditionally assumed and highlight the role of managerial perceptions in financial decision-making.

Suggested Citation

  • Xiaoqiao Wang & Jing Xie & Bohui Zhang & Xiaofeng Zhao, 2025. "Investor communication and payout policy: a field experiment," Review of Finance, European Finance Association, vol. 29(6), pages 1833-1870.
    • Handle: RePEc:oup:revfin:v:29:y:2025:i:6:p:1833-1870.
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    File URL: http://hdl.handle.net/10.1093/rof/rfaf044
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    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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