The Lintner model revisited: Dividends versus total payouts

Andrés, Christian; Doumet, Markus; Fernau, Erik; Theissen, Erik

doi:10.1016/j.jbankfin.2015.01.005

Cited by 36 publications

(21 citation statements)

References 33 publications

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“…The international evidence presented in Jacob and Jacob () suggests that tax issues are an important determinant of corporate payout decisions, but that the effects are smaller than reported in previous single‐country studies. We note, though, that results of previous research indicate that tax considerations are not a first‐order determinant in the payout decision of German firms (e.g., Amihud and Murgia, ; Andres et al , , ).…”

Section: Institutional Backgroundcontrasting

confidence: 56%

“…Jagannathan et al () provide evidence that dividends are paid out of permanent cash flows while repurchases are paid out of transitory cash flows. Andres et al () support this finding for German firms. Following these results, firms with more volatile cash flows should be more likely to experience transitory changes in cash flows and should thus be more likely to repurchase shares.…”

Section: Hypothesesmentioning

confidence: 77%

“…As the latter investors favour repurchases over dividends we thus expect an inverse relation between dividend yield and the probability of a repurchase. However, despite these arguments, previous papers indicate that tax considerations are not a first‐order determinant of payout decisions of German firms (see Amihud and Murgia, ; Andres et al , , ).…”

Section: Hypothesesmentioning

confidence: 94%

See 2 more Smart Citations

Open Market Share Repurchases in Germany: A Conditional Event Study Approach

Andrés

Betzer²,

Doumet³

et al. 2016

Abacus

Self Cite

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe analyze the decision to announce an open market share repurchase and the share price reaction to the announcement. We use a conditional estimation approach which takes into account that the repurchase decision is made rationally and that, consequently, there is a potential selection bias. This approach requires a "non-event sample" of firms that could reasonably be expected to announce a repurchase but did not. The specific institutional rules for share repurchases in Germany allow us to construct such a sample. We find that a conditional approach yields results that are qualitatively comparable but differ in detail from those obtained using a non-conditional approach. We confirm earlier findings of negative share price performance prior to the repurchase announcement and positive and significant announcement day abnormal returns. The results of our probit models are consistent with the free cash flow hypothesis and provide at least partial support for the rent extraction, signalling and capital structure hypothesis. The results of the crosssectional regressions provide strong support for the signalling hypothesis once we control for selection bias.

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Section: Institutional Backgroundcontrasting

confidence: 56%

Section: Hypothesesmentioning

confidence: 77%

Section: Hypothesesmentioning

confidence: 94%

See 1 more Smart Citation

Open Market Share Repurchases in Germany: A Conditional Event Study Approach

Andrés

Betzer²,

Doumet³

et al. 2016

Abacus

Self Cite

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“…The study of Javakhadze et al (2014) show that Lintner (1956) dividend smoothing model works internationally, but with cross-sectional differences. Andres et al (2015) also found partial adjustment in dividend is valid in both dividends and total payouts. Notwithstanding the small number of empirical studies which support the irrelevance hypothesis (Bernstein 1996;Black and Scholes 1974;Miller and Rock 1985), there are a number of studies showing that the dividend payout decisions of the company are influential on share prices (Al-Malkawi et al 2010;Kadioglu et al 2015).…”

Section: Literature Reviewmentioning

confidence: 81%

Determinants of Dividend Payout Decisions: A Dynamic Panel Data Analysis of Turkish Stock Market

Bostanci¹,

Kadioglu²,

Sayilgan

2018

IJFS

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This study analyzes the firm-specific factors affecting the dividend payout decisions of the companies whose shares are traded on the Borsa Istanbul stock exchange. To this end, the dynamic panel regression is applied to 853 observations of yearly average of 106 companies listed on the Borsa Istanbul between 2009 and 2015. According to results from the Arellano–Bover/Blunder-Bond two-step system generalized method of moments, a statistically significant positive effect on dividend payout was found in the relationship between the dividend payout of the previous year, the company’s return on equity and the market value/book value ratio, liquidity and the company’s size. The demonstration of a positive relationship between dividend payout and return on equity supports the free cash flow hypothesis and the positive relationship with the previous year’s dividend payout ratio supports the dividend smoothing hypothesis for Turkey.

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“…54. See Andres, Doumet, Fernau, and Theissen (2015). Jagannathan, Stephens, and Weisbach (2000) and Guay and Harford (2000) provide similar U.S. evidence.…”

Section: Dividends and Share Repurchasesmentioning

confidence: 92%