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Corporate payout policy: are financial firms different?

Author

Listed:
  • Emmanuel Caiazzo
  • Leonardo Gambacorta
  • Tommaso Oliviero
  • Hyun Song Shin

Abstract

It is well documented that financial firms display a larger corporate pay-out propensity than non-financial firms. By using an international sample of listed firms from advanced economies, we show that this difference vanishes after accounting for heterogeneity among corporations in their financial leverage, stock market liquidity and share-ownership by institutional investors. A theoretical model that builds on Acharya et al. (2017) provides a framework to analyze the effect of corporate structure on payout decisions and rationalizes the economic mechanisms behind our empirical results.

Suggested Citation

  • Emmanuel Caiazzo & Leonardo Gambacorta & Tommaso Oliviero & Hyun Song Shin, 2024. "Corporate payout policy: are financial firms different?," BIS Working Papers 1168, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1168
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    References listed on IDEAS

    as
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    2. He, Wen & Ng, Lilian & Zaiats, Nataliya & Zhang, Bohui, 2017. "Dividend policy and earnings management across countries," Journal of Corporate Finance, Elsevier, vol. 42(C), pages 267-286.
    3. Ľuboš Pástor & Veronesi Pietro, 2003. "Stock Valuation and Learning about Profitability," Journal of Finance, American Finance Association, vol. 58(5), pages 1749-1789, October.
    4. Kuo, Jing-Ming & Philip, Dennis & Zhang, Qingjing, 2013. "What drives the disappearing dividends phenomenon?," Journal of Banking & Finance, Elsevier, vol. 37(9), pages 3499-3514.
    5. Kanas, Angelos, 2013. "Bank dividends, risk, and regulatory regimes," Journal of Banking & Finance, Elsevier, vol. 37(1), pages 1-10.
    6. Lubos PÁstor & Veronesi Pietro, 2003. "Stock Valuation and Learning about Profitability," Journal of Finance, American Finance Association, vol. 58(5), pages 1749-1790, October.
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    More about this item

    Keywords

    corporate payout policy; dividends; financial firms; risk-shifting;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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