Dividend Policy, Corporate Control, and Tax Clienteles

Luis Correia Da Silva, Marc Goergen and Luc Renneboog

in Dividend Policy and Corporate Governance

Published in print February 2004 | ISBN: 9780199259304
Published online April 2004 | e-ISBN: 9780191600852 | DOI:
 Dividend Policy, Corporate Control, and Tax Clienteles

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Analyses the link between dividend levels and control as well as dividend changes and control based on German data. We find a U‐shaped relation between the dividend payout and the proportion of voting equity held by the largest shareholder. Bank‐controlled firms pay out lower dividends and are much more likely to omit their dividend than any other type of firm. Conversely, there is no evidence that the tax status of the major shareholder has an impact on a firm's dividend policy.

Keywords: dividend cuts; dividend flexibility; dividend increases; dividend omissions; dividend policy; Germany; Lintner model; tax clientele; UK; US

Chapter.  16430 words.  Illustrated.

Subjects: Financial Markets

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