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The incidence and persistence of dividend omissions by Spanish firms

  • Andrew Benito

    ()

    (Banco de España)

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.

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File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/03/Fic/dt0303e.pdf
File Function: First version, April 2003
Download Restriction: no

Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0303.

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Length: 46 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:bde:wpaper:0303
Contact details of provider: Web page: http://www.bde.es/
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  1. Fama, Eugene F. & French, Kenneth R., 2001. "Disappearing dividends: changing firm characteristics or lower propensity to pay?," Journal of Financial Economics, Elsevier, vol. 60(1), pages 3-43, April.
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  4. Andrew Benito & Garry Young, 2001. "Hard Times or Great Expectations?: Dividend omissions and dividend cuts by UK firms," Bank of England working papers 147, Bank of England.
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  8. Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
  9. Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  10. Robert E. Carpenter & Bruce C. Petersen, 2002. "Capital Market Imperfections, High-Tech Investment, and New Equity Financing," Economic Journal, Royal Economic Society, vol. 112(477), pages F54-F72, February.
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  12. Richard Blundell & Steve Bond & Frank Windmeijer, 2000. "Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator," IFS Working Papers W00/12, Institute for Fiscal Studies.
  13. Fudenberg, Drew & Tirole, Jean, 1994. "A Theory of Income and Dividend Smoothing Based on Incumbency Rents," IDEI Working Papers 34, Institut d'Économie Industrielle (IDEI), Toulouse.
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  25. María Arrazola & José de Hevia & Gonzalo Mato, 1992. "Determinantes de la distribución de dividendos," Investigaciones Economicas, Fundación SEPI, vol. 16(2), pages 235-258, May.
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