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The effects of cash dividend policies on the capital accumulation of non-bank firms operating in The United States (S&P 500), The United Kingdom (FTSE 100), Japan (Nikkei 225), and France (CAC 40) have been investigated in this study. The dataset used in the study consists of annual observations between 2010 and 2015. Also, the data were retrieved from the Thomson Reuters database. The system in GMM is employed in the econometric estimations in this paper. “Total effect” of cash dividend policies on capital accumulation has been bisected as “direct” and “indirect” effects. In this study, we call the effect of the cash dividend policies on investments via financial and liquidity constraints as “direct effect” and the effect of the policies on the accumulation via market value and business reputation as “indirect effect”. Obtained results show that the indirect effect is positive, whereas the direct effect is negative. However , the magnitude of the direct effect is larger than that of the indirect. Therefore , the total effect of cash dividend policies on the accumulation of capital and investments is negative. The fact that movements in stock prices of firms have an effect on the capital accumulation has shown that the financial markets could affect real economic variables. Also, the results that the cash dividend policies positively affect the market value of firms are mounting evidence to the validity of Signalling and Information Content Approach and Bird in Hand Theory. .

This study aims to determine whether companies with surpluses are more capable of maintaining their dividend rate if they issue cash dividends from capital reserves. Further, it considers whether s...

Using a sample of listed companies from the Chinese stock market between 2003 and 2017, this article investigates the effect of corporate diversification on cash dividend payments and the exacerbat...

Dividends are distributed to shareholders as earning after tax from company profit.The amount or percentage of profit taht a company will pay to shareholders as cash dividends is called the dividend payout ratio. The size of the dividend distributed by a company depends on the dividend plicy of the company, so it is necesarry to consider the comapny regarding the factors tha influence the dividend policy. The sample in this study was 34 manufacturing companies listed on the Indonesia Stock Exchange in 2015-2018.Determination of the sample using purposive sampling method. The analytical tool used is mutiple linear regression analysis. The result of the study using the t test showed that CR, DER, and investment had no significant effect on the dividend payout ratio, whereas ROE, had a positive ad significant effect on the dividend payout ratio. And company growth has negative effect on dividend payout ratio

The list prices of analogue insulin medicines in the United States have soared during the past decade. In the wake of high-profile cases of prescription medicine “price-gouging”, such as Mylan’s EpiPen and Turing-acquired Daraprim, actors across the insulin supply chain are today facing growing scrutiny from US lawmakers and the wider public. For the most part, however, the role of shareholders in the insulin supply chain has been overlooked. This paper considers the relationship between profits realized from higher insulin list prices, pharmaceutical innovation, and the financial structures of the three dominant insulin manufacturing companies, which set list prices. It shows that despite claims to the contrary, insulin manufacturers extracted vast profits from the sale of insulin products in the period 2009-2018, as insulin list prices rose. Distributions to the company shareholders in the form of cash dividends and share repurchases totaled $122 billion over this period. The paper also considers the role of other actors in the insulin supply chain, such as pharmacy benefits managers (PBMs), in the determination of list prices. The data and analysis presented in the paper indicates that financialization could be considered in tension with not only the development of new drugs that will be available to patients in the future, but also the affordability of products that already exist today.

Our paper reveals that family-controlled firms pay less cash dividends than non-family-controlled firms in Taiwan, which differs from moderating proxy problems by increasing dividend payouts due to reduced free cash flow. These family-controlled firms might not be regarded as a problem due to the improved corporate governance and high firm value in Taiwan, which is contrary to relevant studies. Dividend payouts for family-controlled firms in the West and East, such as asset allocation, might be affected by various factors, including culture, nationality, and philosophy, which are seldom considered deliberately in existing literature.

The paper examines the factors influencing dividend payout decisions. Our analysis is based on unbalanced panel data with 799 observations of companies from 15 countries over a period of 14 years. The study develops eight research hypotheses and uses a modelling approach based on the random effects panel probit model. An important conclusion reached in our study is that a company’s financial situation in preceding year influences the dividend payout decision. In addition, the key significant determinants of dividend payout decision in the period covered by our study include free cash flow, growth, liquidity, profitability and size. These important research results are confirmed by other studies in the field. They are therefore essential for determining dividend policies. Individual effects across investigated enterprises also played an important role in the dividend policy.

Dividend policy has been puzzling for researchers for decades. The level of dividend varies not only across industries, but also across countries. This research analyzes the dividend policy of Indonesian public companies, in particular it examines the partial effect of cash ratio, debt ratio, company size, profitability, and asset growth on cash dividend policy in Indonesia Stock Exchange from 2008 to 2015. A total of 102 companies was used as a sample. The samples are divided into four groups: (1) a group of companies paying changeable dividends (Change group), (2) a group of companies paying continuous dividends, but then stop paying dividend (Omission group), (3) a group of companies that initially do not pay the dividends, but then continuously paying dividend (Initiation group); and (4) a group of companies paying constant dividends (Constant group). Results of hypotheses testing using multiple regression analysis show that profitability and asset growth affect dividend policy in all company groups. Company size affects dividend policy in the Change, Initiation, and Constant groups. Debt ratio influences dividend policy only in the Change group.

Cash dividend is one form of return expected by shareholders. But on the other side, cash dividend is an expense for the company. This conflict of interest is a factor affecting the company in determine the amount of cash dividends. So, the researcher conducting research which aims to test and analyze the influence of Current Ratio, Net Profit Margin, Debt to Equity Ratio, EPS, Free Cash Flow, and Previous Year Dividend to Cash Dividend paid by company. The sample used in this reasearch is manufacturing company listed on the Indonesia Stock Exchange (BEI) in 2014 to 2016. After sampling the results showed there are 17 companies that can be sampled with a period of three years. So the total sample in this research are 51 samples. The result of this research shows that (1) Current Ratio has positive effect to Cash Dividend, (2) Net Profit Margin has no effect to Cash Dividend, (3) Debt to Equity Ratio has no effect to Cash Dividend, (4) EPS has positive effect to Cash Dividend , (5) Free Cash Flow has no effect to Cash Dividend, (6) Previous Year Dividend has no effect to Cash Dividend.

This study aimed to establish the effect of cash dividend announcement on share price reaction of the firms listed on the Nairobi Securities Exchange (NSE). This study used Event Study methodology with purely secondary drawn data from 24 firms listed on the NSE who meet the study threshold with an event window of eleven (11) days during the year 2008-2013. The study adopted the descriptive research design and sampling de-sign being purposive. STATA version SE12 was used to produce a descriptive analysis. The findings indicate that the share price reaction to dividend announcement is posi-tive for a dividend increase and negative for dividend decrease and constant for the constant dividend. The study therefore recommends that the effect of the dividend on the firm’s share price is very crucial for not only the literature but also for the regula-tion and supervision of the capital market and that further development of accounting standards, increased auditing skills, and advances in investor education will likely make dividends even more important in the future. Following these findings, it would be useful to also consider the following directions for future research on whether there is any joint effect of cash dividend, bonus issues, and right issues on the share price of firms listed on NSE.

Stocks that initiate dividends tend to comove more with other dividend-paying stocks and comove less with non-dividend payers. This is also true for: (a) dividend initiations that are motivated by the exogenous 2003 dividend tax cut; and (b) the cash dividend share class of Citizens Utilities (relative to its stock dividend class). We find that flows to dividend prone (averse) mutual funds increase the comovement among dividend-paying (non-dividend paying) stocks. Overall, the evidence supports the proposition that the trading of pro-dividend (dividend-averse) clienteles induces an extra factor in dividend payers (non-payers), beyond those associated with changes in common factors.

We provide new evidence on price disparity between Chinese A- and H-shares for cross-listed companies in the period 2006–2019. Our panel-data results show that the A-share price premium is negatively related to cash dividends and expected relative currency values between mainland China and Hong Kong. International investors in H-shares prefer companies that pay dividends regularly, and they buy when the Chinese currency is expected to appreciate. A discounted dividend theoretical model explains these results.

This study attempts to explore the effect of dividend policy on the stock prices of the companies in Turkey. A balanced panel data set has been formed with 102 companies listed on Borsa Istanbul Industrial Index (XUSIN) for the period 2004-2016. The results of the models used in the study show no statistically significant effect of gross dividend payout ratio, cash dividend payout ratio and their one-year lagged values on stock prices.

This study examines the presence of catering for various dividend policies in Taiwanese firms, including cash, stock and dual dividends. Different from prior results in the literature, we find that the catering phenomenon exists for these three types of dividend decisions. When one type of dividend premium (i.e., cash dividend) is high, managers are more likely to issue the same type of dividend and less likely to issue the other type of dividend (i.e., stock dividend). Catering persists even after controlling for the effects of a firm’s characteristics, risk and external policy, as well as macroeconomic situations. JEL Classification: G35, C23

Purpose This study aims to examine dividend policy from the perspective of institutional investors in India. It focuses on the level of importance these investors attach to the dividend policy of their investee firms, the level of influence they exercise in shaping such firms’ dividend policies and their reactions to changes in dividends. This study also reports how institutional investors view various explanations for paying dividends. Design/methodology/approach A mail survey provides a profile of respondents and their firms, as well as responses to 29 closed-ended questions involving various explanations for paying dividends and 22 closed-ended questions on various dividend issues. Findings The evidence shows that Indian institutional investors attach substantial importance to dividend policy and prefer high dividend payments. Their reactions to dividend changes are asymmetric. Taxes are a major driver for why they seek dividends, whereas liquidity needs to play little role in shaping their preferences. The two most commonly used methods of active monitoring are selling shares and communicating concerns to investee companies. Research limitations/implications The number of responses limits the ability to test for statistically significant differences between the various competing hypotheses. Practical implications The findings support multiple explanations for paying cash dividends and provide new evidence supporting the positive relation between inflation and dividend payments. Originality/value This study provides the first survey evidence on the views of institutional investors on dividend policy in India.

We examine how organizational form affects corporate payouts. Conglomerates pay out more than pure plays in both cash dividends and total payouts (cash dividends plus share repurchases). Furthermore, their payouts are more sensitive to cash flows compared to pure-play firms. The sensitivity of payouts to cash flow increases as the cross-segment correlation in a conglomerate decreases. Corporate payouts increase after mergers and acquisitions (M&As), especially among M&As in which acquirers and targets are less correlated. These results suggest that the coinsurance among different divisions of a conglomerate allows them to pay out more cash flow to their shareholders than pure-play firms.

This article examines how stock prices behave following cash dividend announcements in the Indian equity market considering 3,671 cash dividend announcements during the period 2012–2019, using both aggregate-level and firm-level analysis. Further, the study investigates the factors that lead to the generation of abnormal gain or loss following dividend announcements. We found that cash dividend announcements generate abnormal stock returns in the Indian equity market immediately after the dividend announcement. However, this impact persists for a very short spell, and after that, the stock prices normalize gradually. Results also show that firms with a higher promoter shareholding gain less on dividend announcements. The empirical evidence of this study thinly supports the information signalling theory and dividend clientele theory in the Indian market.

Using a random sample of US companies affected by a regulatory experiment (i.e. the Regulation SHO adopted by the SEC in 2004), this thesis examines whether the removal of short-selling constraints affects corporate payout decisions. We find that companies pay higher cash dividends but do not repurchase more shares in response to the relaxation of short-selling constraints. The response of increased cash dividends is concentrated in small firms. Our finding is consistent with the literature that paying cash dividends can be used to deter short-selling activities as a more costly and hence a more reliable signal of stock undervaluation than share repurchases. Our result shows that short-selling activity has a causal effect on corporate payout decisions.

According to a recent survey by McKinsey and Company, the Indian manufacturing sector is expected to touch US$ 1 trillion by 2025.This study analyses the impact of the announcement of cash dividends on the stock price returns of the manufacturing companies listed on Bombay Stock Exchange using event study methodology. Further, it explores whether the US financial crisis recession impacted average abnormal returns (AARs) in the period of study. The empirical results show that cash dividend announcements have positive AARs. Overall, the results lend support to the signalling and informational content hypotheses of dividends. The paired samples t-test indicates a significant difference in the mean values of AARs in the pre-and post-recession phases, highlighting the impact of recession.

Several recent studies have used option-implied dividends to investigate the term structure of equity. A crucial question is whether these dividend strips need to be adjusted to take into account the difference in taxation between dividends and capital gains. Unlike prior research, we find an option-implied ex-day decline that is less than the cash dividend and of a similar magnitude to the overnight ex-day stock price decline. In addition, we use put-call arbitrage to identify several option mispricing factors. Our method for calculating market expectations of dividends is useful for research topics including dividend policy, analyst forecasts, and asset pricing.

Nowadays, since the most of individual investors provide money to company for real cash inflows, paying cash dividend, as the main way to pay money back to the investors, is definitely paid more attention to. But for the company, keeping money in itself can help to grab development opportunities in time. This essay reveals the possible outcomes in dividend policy because of the ultimate controller’s changing. Given to the results of existing research works and the data from Chinese listed companies, after exemplifying some typical cases, the conclusion can be illustrated clearly: The ultimate controller’s changing effect cash dividend payment by generating disputes of share transfer, complicating the pyramid-shaped shareholding structure, and damaging corporate governance and operating ability. Further more, auditing and cash dividend payment are substitutes for each other as corporate economic supervision tools. Meanwhile, auditing can reduce the negative influence of ultimate controller’s changing so that investors can get more cash dividend. This paper offers a new perspective for studies about the factors of cash dividend tendency and briefly discusses how the heated topic of auditing exerts influence on the relationship.

We propose a behavioral dividend clientele view to explain a unique “ex-dividend day” anomaly on the Chinese stock market. In particular, we find that on the ex-dividend day, the average CAPM-adjusted stock return is significantly below zero and the average trading volume significantly shrinks, which are different from the theoretical predictions and existing findings drawn from other stock markets. Such patterns tend to be driven by small retail investors who are net buyers of dividend paying stocks prior to the ex-dividend day and switch to net sellers of on and after the ex-dividend day. Furthermore, we find “dividend price”, the negative deviations of ex-dividend day stock return from zero, is positively associated with dividend yields and the idiosyncratic risks of the underlying stocks. These findings suggest that investors with strong non-monetary and psychologically driven dividend preferences can result in a unique “ex-dividend day” anomaly.

Payout policy is one of the most important policies set by firms and represents a major use of capital by publicly traded corporations. Firms should consider future economic activity and future firm performance when determining payout policy choices, given they are cash outflow commitments from the firm. We empirically examine whether firms use economic outlook when determining payout policy using publicly available data from the Chicago Federal Reserve Bank and Compustat. We find that economic outlook is positively related to firm payout policy. Specifically, we find that firms are more likely to pay out cash dividends and repurchase shares when economic outlook is positive. Furthermore, when examining only firms already paying dividends and/or repurchasing shares, firms pay greater amounts of cash dividends and repurchase more shares when economic outlook is positive. We are the first, to our knowledge, to examine whether firms use economic outlook to determine their payout policy. Our paper motivates future research in corporate finance to examine how firms use economic outlook when making capital planning decisions.

In recent years, there have been more and more companies distributing cash dividends in the A-share market. Most of the research on the level of cash dividend payment has studied the entire A-share market with a sample of CSI 300. This paper takes the relevant data of CSI 500 listed company from 2015 to 2017 as the research sample, and uses the event research method to study the impact of the cash dividend distribution level of China's small and medium-sized listed companies on the stock price from a short-term perspective. The research shows that the cash dividend policy has a signal transmission effect; however, it is not the higher the dividend rate, the better the impact on stock price. The dividend rate of more than 3% has the best and positive impact on stock price, the dividend rate of less than 1% is in the middle, and the dividend rate of 1% - 3% is the worst performance, which has a negative impact on stock price.

The financial decision is rotated around the dividend decision. The objective is to identify the dividend pattern and the management’ views of dividend policy for revealing the present scenario of dividend practices in the capital market of Bangladesh. The parametric test, non-parametric test and percentile are used for inferring the result. In the manufacturing sector, the miscellaneous sector provides the highest payout. The DPS, EPS, MPS of the large size firm is better than small and medium size firms. The payout of the older firms is more than the newly listed firms. The highest payouts are in medium leveraged firm, low risk’s firm, medium PE ratio’s firm. The survey results reveal that the both shareholders and companies prefer the cash dividend most because of majority shareholders’ expectation. The most of the companies pay cash dividend with stable payout. The majority companies follow increasing trend in dividend payment but there is no satisfactory research to justify the investors’ preference. The capital market related stakeholders should follow these findings.

This research aims to analyze factors of stock liquidity, size, profitability, growth, leverage, and cash which affect cash dividend. Independent variable such as stock liquidity, size, profitability, growth, leverage, and cash which affect cash dividend. This research use quantitative approach by using multiple linier regression. The sample of this research is the non-financial company that listed in IDX (Indonesia Stock Exchange) for period of 2012 to 2016. Final samples which are used in this research were 78 business entities with 390 observations. Based on this research, the result show that stock liquidity, and growth give positive effect to cash dividend. size, profitability, leverage, and cash give negative effect to cash dividend. Cash Dividend, Stock Liquidity, and Informational Effect

This paper examines the relation between share pledging and cash holdings of Chinese A-share listed-firms. We find that during the years 2005 through 2015, the level of share pledging is negatively associated with cash holdings. We establish causality through a variety of econometric techniques, including a difference-in-differences approach based on a regulatory change that permits security companies to lend money to borrowers pledging their shares as collaterals. In addition, we find that the main effect is more prominent for financial constrained firms, and share pledging is associated with lower cash/investment-cash flow sensitivities and more cash dividend payouts. Overall, our findings indicate that share pledging can alleviate financial constraints of listed firms and reduce their tendencies of holding cash for precautionary motives.

The main aim of this study is to investigate the impact of cash dividends and firm factors on earnings management. The Ordinary Least Square (OLS) regression analysis is utilized to examine the impact of both cash dividends and firm factors, as independent variables, on earning management, the dependent variable, measured by Jones Model with a cross sectional approach using 27 firms listed in the Bahrain Bourse (BHB) for a period of 10 years starting from 2004 to 2013. Results of the study indicate that cash dividends have no clear impact on earnings management. However, a number of firm factors namely firm ownership structure; firm size; firm financial leverage; firm performance and quality of audit firm have statistically significant impact on earnings management.

Firms can use dividends and/or share repurchases to distribute cash to shareholders. Jagannathan, Stephens, and Weisbach (2000) argue that managers tend to use dividends to pay out permanent cash flows and repurchases to pay out temporary cash flows. This paper examines Korean firms’ decisions on their choices between paying out cash flows in the form of dividends or share repurchases. We focus on the permanence of cash flows. To complete this analysis, we decompose cash flows into a transitory component and a permanent one of each firm, employing the approach of Beveridge and Nelson (1981). We find that higher permanent cash flows increase the probability of a dividend increase, while higher temporary cash flows increase the probability of repurchases. And Korean firms tend to choose both dividend change and repurchases when temporary cash flows increase, rather than to choose only repurchases without dividend change. These empirical results show that Korean firms take into consideration of permanence of cash flows in the choice of their payout methods.

This study examines the cash dividend behaviour of a panel dataset of 1,178 firms traded in the London Stock Exchange (LSE) for the period 2008–2017. Using a modified version of Lintner's (1956) partial adjustment model, it attempts to ascertain whether they follow a stable dividend policy and how the 2008 global financial crisis affects the dividend stability in the UK. The results in general show that LSE firms have long-term payout ratios and slowly adjust their cash dividends to their target as suggested by Lintner. The study findings also detect a negative impact of the financial crisis on dividend payments and a tendency to adjust dividends immediately in response to earnings changes in the first five-year period 2008–2012. More specifically, despite the credit crunch and volatile earnings, UK firms set high payout rates but adopt stable dividend policies with a serious degree of dividend smoothing in early years. When UK-listed firms have a better chance to recover from the initial impact of the crisis, they however set even higher payout rates but distribute much more smoothed cash dividends (exhibiting more stability) over the second five-year period 2013–2017.

There have been many studies in the past which have studied the relationship between dividend policy of a firm its characteristics. This study builds upon these and extends the research to publicly traded, North American firms in the past 30-year time period (1989-2019). The key question that this research paper aims to answer is which, if any, firm characteristics have any causal relationship with the dividend payout ratio of the firm. This study also looks at the appearing and disappearing phenomenon of cash dividends in the past 30 years and aims to reconcile the changing characteristics of the firms to this phenomenon. This is done by creating sub-periods within the dataset and observing the changing characteristics of the firms and the possible impact on the dividend payout ratios of the firms. It was found that size and liquidity produce statistically significant results in terms of having some relationship the dividend payout ratios of the firms. After performing the Granger-Causality test, it was determined that only liquidity of the firm has some causal relationship with the dividend payout ratio of a firm.

We derive a consistent valuation approach integrating the interdependent effects of cash dividends, share repurchases, and active debt management while considering personal taxes. Additionally, we identify effects of share repurchases on the cost of equity by deriving appropriate adjustment formulae. Furthermore, we run simulations to investigate the valuation differences caused by distribution of excess cash via cash dividends or share repurchases. The results show that share repurchases have a significant positive effect on equity market value.

Dividend policy is very important to the development opportunities and scale of listed companies. Cash dividend payment level is an important form of investors’ return on investment. The research on the degree of the influencing factors of dividend policy is significant to optimize the management of listed companies and safeguard investors’ investment rights and interests. From the angle of ownership structure, the data of 2169 listed companies in the A stock market of China for 2014–2016 years are taken as samples, and the multiple linear regression model is used to make an empirical analysis. First, there is a significant difference between the proportion of the first large shareholders, the proportion of non circulation shares, the equity balance and the level of cash dividend payment. Linear correlation; second, the proportion of the first largest shareholder is positively correlated with the level of cash dividend payment, but the effect is relatively weak; third, the proportion of non circulation shares and the balance of equity have positive impact on cash dividend payment level. Therefore, listed companies should optimize the ownership structure to raise the level of cash dividend payment and stabilize dividend policy.

The study examines how share pledging behavior of controlling shareholder affects the corporate payout policy using the unique setting of Chinese market from 2008 to 2015. According to the study result, cash dividend payments for firms with shares pledged by controlling shareholders are significantly decreased relative to those without shares pledged, and the effect is stronger for non-state-owned enterprises (non-SOEs), firms with more related party transactions, and pledged shares with more magnitude, frequencies and maturity. Overall, these findings suggest that induced by the share pledging activity, controlling shareholders can obtain private benefits without considering benefits of outside shareholders.

This study examines whether investment horizons among institutional investors affect cash dividend payout policies among firms. We use institutional ownership volatility and persistence to measure institutional ownership stability. We find that cash dividend payout ratios are negatively correlated to volatility and positively correlated to persistence. The results suggest that firms with stable institutional investors encourage managers to pay cash dividends rather than invest in suboptimal projects or perquisite consumption. Furthermore, this study tests whether the impact of institutional ownership stability on cash dividend policy matters in firms with greater agency costs. This study finds that stable institutional ownership increases cash dividends for firms with severe or slight agency problems. These findings suggest that institutional ownership stability plays an important role in monitoring and hence in determining cash dividends.

Whether internal control and cash dividend will have an interactive synergetic effect on enterprise performance or not is a study of both theoretical value and practical significance. Consequently, this article adopts a two-stage investment decision research process, explains the complex theoretical relationship among internal control, cash dividend and enterprise performance and, taking the Chinese A-share motherboard as an example, further explores their interactive synergetic effect. The research concludes that: (1) Internal control and cash dividend can contribute to the improvement of both short-term and longterm enterprise performance; (2) Internal control and cash dividend do have a significant synergetic effect, however there is a large disparity between the synergetic effect on short-term and long-term enterprise performance. In addition, the study finds that internal control and cash dividends are mutually regulative, thereby diminishing the positive impact on short-term enterprise performance and conversely enhancing the positive impact on long-term enterprise performance respectively.

The investment decision is influenced by many factors, of which one such factor is the return. The shareholders may get the return in the form of dividends which affects the share prices. The behavior of stock prices is unpredictable as price movement for different activities will move in different ways. The stock price influence activities can be divided into Economic and corporate activities. The impact of economic activities will be more or less the same on all the stock prices, while the impact of corporate action varies from one stock to the other. Dividend payment is one of the essential corporate actions that will impact the behavior of stock prices. This research highlights the impact of dividend payment on the behavior of stock prices and their abnormal returns. To understand this behavior, 120 stocks have been randomly picked, which have paid cash dividends in 2016 and used the popular event methodology.

This study investigates the effect of family firm on corporate performance and financial policy (capital structure, cash holding, and cash dividends). Using a sample of Brazilian firms, the study uses a treatment effect model to address self-selection and endogeneity problems. The results show that family firm has a negative net effect on performance. Family control has an effect on financial policies that indicate a aversive behavior to preserve control. The results indicate less problem of free cash flow and more risk-taking behavior in family-manage companies, suggesting that such aversion behavior is reduced when the family controls and manages the firm. This is the first study that takes into account the effect of family firm behavior through multiple financial policies

We study the influence on firm risks of NASDAQ and NYSE firm payout initiations and omissions. These payout events can be interpreted as managerial signals of firm financial life-cycle maturation resulting in concomitant changes in firm risks. We remove confounding payout types and we match on the propensity to initiate or omit informed by determinants of payout known to investors in advance. For payout event and matched firms, we apply the difference-in-differences method to estimate the effect of the information content of actual initiations and omissions on firm risks. We find consistent significant declines in total, aggregate systematic, and idiosyncratic firm risks after cash dividend initiations and increases after dividend omissions, but only incidentally after share repurchase initiations and omissions. (C) 2014 Elsevier B.V. All rights reserved.