Dividend Policy of German Firms. A Dynamic Panel Data Analysis of Partial Adjustment Models

Goergen, Marc; Silva, Luis Correia da; Renneboog, Luc

doi:10.2139/ssrn.563621

Cited by 21 publications

(5 citation statements)

References 22 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The dividend smoothing practices of Dutch firms are insufficient to explain this discrepancy. In the model, the level of dividend smoothing is relatively high at 1 =0.74 (the speed of adjustment is correspondingly low at 1-0.74=0.26), which is comparable to that reported for Germany by Goergen et al (2004). Still, it is likely that dividend policy in the Netherlands is largely driven by other determinants that Model 1b does not control for.…”

Section: General Patterns In Dividend Behaviorsupporting

confidence: 51%

“…This is a remarkable finding which contradicts Lintner's (1956) hypothesis that firms determine their desired payout ratios as a function of their after-tax earnings. Goergen et al (2004) find that operating cash flows better predict dividends in Germany as well 10 . The authors propose two possible explanations for this result.…”

Section: General Patterns In Dividend Behaviormentioning

confidence: 91%

“…Goergen et al (2004) find that the relationship between net income and dividends only holds when the regression simultaneously controls for cash flow. Our results are invariant to such alternative specifications.…”

mentioning

confidence: 86%

See 2 more Smart Citations

How Relevant is Dividend Policy Under Low Shareholder Protection?

Szilágyi

Renneboog

2007

SSRN Journal

Self Cite

View full text Add to dashboard Cite

This paper reopens the debate on the substitutability of dividends and shareholder control in mitigating free cash flow concerns, by examining dividend behavior when shareholder control is restricted in the firm. We consider the stakeholder-oriented governance regime of the Netherlands, where shareholdings are concentrated, but shareholder rights are often severely restricted by a legally imposed governance regime and anti-shareholder devices such as Dutch-style poison pills. We find that dividend payouts are generally low, unresponsive to earnings changes and show little relationship with size, leverage, and investment opportunities. Shareholder power restrictions affect dividend behavior to varying degrees, but those that do are used by the vast majority of Dutch listed firms. Once accounting for these, we find no evidence that strong shareholders would allow firms to relax their dividend policy, as has been proposed in the existing literature. As shareholders, institutional investors and managers actually force higher payouts. Thus, it seems that dividends often complement rather than substitute shareholders' efforts to alleviate agency concerns. This finding is unlikely to be specific to the Netherlands, and could possibly be extended to other stakeholder-oriented governance regimes. JEL classification: G35; G32; G30Abstract -This paper reopens the debate on the substitutability of dividends and shareholder control in mitigating free cash flow concerns, by examining dividend behavior when shareholder control is restricted in the firm. We consider the stakeholder-oriented governance regime of the Netherlands, where shareholdings are concentrated, but shareholder rights are often severely restricted by a legally imposed governance regime and anti-shareholder devices such as Dutch-style poison pills. We find that dividend payouts are generally low, unresponsive to earnings changes and show little relationship with size, leverage, and investment opportunities. Shareholder power restrictions affect dividend behavior to varying degrees, but those that do are used by the vast majority of Dutch listed firms. Once accounting for these, we find no evidence that strong shareholders would allow firms to relax their dividend policy, as has been proposed in the existing literature. As shareholders, institutional investors and managers actually force higher payouts. Thus, it seems that dividends often complement rather than substitute shareholders' efforts to alleviate agency concerns. This finding is unlikely to be specific to the Netherlands, and could possibly be extended to other stakeholder-oriented governance regimes.

show abstract

Section: General Patterns In Dividend Behaviorsupporting

confidence: 51%

Section: General Patterns In Dividend Behaviormentioning

confidence: 91%

See 1 more Smart Citation

How Relevant is Dividend Policy Under Low Shareholder Protection?

Szilágyi

Renneboog

2007

SSRN Journal

Self Cite

View full text Add to dashboard Cite

show abstract

“…However, the study too did not mention any relationship between dividend payout and profits but only examined the different factors determining the dividend payout.Various studies done in Kenya (Njoroge, 2001;Ngunjiri, 2010;Ngobe et al, 2013&Mbuki, 2010 focused on different contexts such as listed firms at NSE, SACCOs. Most studies have been done in developed countries (Pandey, 2001;Zuriawati, Joriah&Abdul, 2012;Khaled, Chijoke&Aruoriwo, 2011 andGoergen et al, 2004) but inadequate studies have been done in developing countries such as in Kenya. Therefore, the main purpose of this study is to investigate the determinants of dividend payout policy of public limited banks with special attention on CFC Stanbic bank in Kenya.…”

Section: Statement Of the Problemmentioning

confidence: 99%

Determinants of Dividend Payout Policy in Public LTD Banks in Kenya: A Case Study of CFC Stanbic Bank

Odawo

2015

strategicjournals.com

View full text Add to dashboard Cite

Dividend policy has been analyzed for many decades, but no universally accepted explanation for companies observed dividend behavior has been established. Many theories and models have been put forth to examine the numerous facets of dividend study. This study sought to establish the determinants of dividend payout policy in public limited banks by examining the effect of liquidity, profitability, firm size and leverage on dividend payout. The study adopted a descriptive research design. The target population of the study was CFC Stanbic Bank where secondary data was for a period of eleven years (2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013). The data was analyzed qualitatively as well as quantitatively using both descriptive statistics and inferential statistics. The results showed that there liquidity was negatively (β = -1.0094) and significantly (p-value = 0.041) related to dividend payout while profitability was positively (β = 0.723) and significantly related (p-value = 0.018) to dividend payout. The results further indicated that firm size is positive (β = 0.794) and significantly (p-value = 0.034) related with the dividend payout. Finally, it was also inferred that leverage had a positive (β = 1.751) and significant (p-value = 0.004) relationship with the dividend payout. From the study findings it was recommended that; first, companies should maintain an optimal level of market liquidity as market liquidity has a negative influence on dividend payout. Secondly, since profitability has a positive and significant influence on dividend payout then companies should strive to engage in profitable ventures so as to be in a position to pay dividends to the shareholders. Lastly, the study recommends that leverage (debt/equity ratio) should be held at an optimal level so that the firm is in a position to pay its shareholders dividends, which is a return for their investments.

show abstract

“…This study differs from those studies by focusing on stable dividend policy. Further, most of the studies Adaoglu, (2000); Oliver et al, (2016); Babiarz, (2020) and Goergen et al, (2009) in this regard were done in developed countries. Additionally, most of the related studies used multiple regression analysis to analyzed the data.…”

mentioning

confidence: 99%

Stable Dividend Policy and Value of Listed Healthcare Firms in Nigeria

Salihu,

Ahmad,

Maigoshi

et al. 2024

gujaf

View full text Add to dashboard Cite

This paper examines the effect of stable dividend policy on the value of listed healthcare firms in Nigeria. The study used correlation research design and utilized secondary data collected from the annual reports and accounts of the sampled companies for a period of 13 years (2008-2020). The population of the study constitutes all the ten (10) listed healthcare firms in Nigeria out of which a sample of eight (8) healthcare firms was drawn. The data were analyzed using descriptive statistics, correlation and regression analysis. Robustness tests were conducted to validate the result. The finding of the study reveals that stable dividend policy has significant positive effect on firm value. Therefore, the study concludes that, accordance with the dividend relevance theory, stable dividend policy of listed Nigerian healthcare firms influences their value. The study recommends that for an increased in firm value, listed healthcare firms in Nigeria should stabilize their dividend policy.

show abstract

Dividend Policy of German Firms. A Dynamic Panel Data Analysis of Partial Adjustment Models

Cited by 21 publications

References 22 publications

How Relevant is Dividend Policy Under Low Shareholder Protection?

How Relevant is Dividend Policy Under Low Shareholder Protection?

Determinants of Dividend Payout Policy in Public LTD Banks in Kenya: A Case Study of CFC Stanbic Bank

Stable Dividend Policy and Value of Listed Healthcare Firms in Nigeria

Contact Info

Product

Resources

About