Dividend Policy and Corporate Governance

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

• ISBN13: 9780199259304
• ISBN10: 0199259305
• Format: Hardcover
• Copyright: 2004-05-06
• Publisher: Oxford University Press

Summary

Dividends are not only a signal about a firm's prospects under asymmetric information, but they can also act as a corporate governance device to align the management's interests with those of the shareholders. Dividend Policy and Corporate Governance is the first comprehensive volume on therelationship between dividend policy and corporate governance, and examines in detail empirical studies and current theories.Reviewing the interactions between dividend policy and other corporate governance mechanisms, it compares results for the UK and the US with those for other countries such as France, Germany, and Japan, and provides new empirical evidence on corporate governance in continental Europe and its impacton dividends. Focusing on one of the main representatives of this system, Germany, it highlights major differences between the dividend policies of German firms and those of UK or US firms. Conventional wisdom states that German dividends are lower than UK or US dividends, yet on a published-profitsbasis the exact converse is true. In addition, the authors demonstrate a link between corporate control structures and dividend payouts, report evidence that the existence of a loss is an additional determinant of dividend changes, and demonstrate that the tax status of the controlling shareholderand the firm's dividend payout are not linked.The conclusions reached in this book have important implications for the current debate on corporate governance, making it invaluable for academics, finance professionals, regulators, and legal advisors.

Author Biography

Luis Correia da Silva is a Director of Oxford Economic Research Associates Ltd. (OXERA) and head of OXERA finance. Marc Goergen is a senior lecturer in finance at the University of Manchester Institute of Science and Technology. Luc Renneboog is Associate Professor at the Department of Finance, Tilburg University and Research Fellow at the Center for Economic Research (Tilburg).

Table of Contents

List of Figures	x
List of Tables	xi
About the Authors	xiii
Part I. Corporate Control and Dividend Policy
1. Introduction	3	(4)
2. Recent Facts and Developments in Corporate Governance	7	(29)
3. A Survey of the Literature on Dividends and Control	36	(25)
Part II. Dividend Flexibility across Corporate Governance Systems
4. Research Questions	61	(4)
5. Empirical Issues on Dividend Payout Ratios	65	(20)
6. Dividend Policy, Earnings, and Cash Flow: A Dynamic Panel Data Analysis	85	(22)
7. When do Firms Change the Dividend Policy?	107	(17)
8. Dividend Policy, Corporate Control, and Tax Clienteles	124	(32)
9. Conclusion	156	(6)
References	162	(13)
Index	175