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The incidence and persistence of dividend omissions by Spanish firms

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  • Andrew Benito

    (Banco de España)

Abstract

This paper examines the dividend policies of firms in Spain. Using firm-level panel data, models are estimated for dividend omissions as functions of financial characteristics, whilst also considering a role for persistence. The results are consistent with a tax discrimination model in which cash flow is the marginal source of funds. High degrees of persistence are also found in binary panel data models that control for unobservables and initial conditions. Whilst companies in Spain use the dividend to adjust the balance sheet, such persistence suggests this occurs slowly.

Suggested Citation

  • Andrew Benito, 2003. "The incidence and persistence of dividend omissions by Spanish firms," Working Papers 0303, Banco de España.
    • Handle: RePEc:bde:wpaper:0303
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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