Taxation and the Cash Flow Sensitivity of Dividends

Jacob, Marcus; Jacob, Martin

doi:10.2139/ssrn.2100300

Download This Paper

Open PDF in Browser

Add Paper to My Library

Taxation and the Cash Flow Sensitivity of Dividends

Economics Letters, Vol. 118, No. 1, 2013

10 Pages Posted: 4 Jul 2012 Last revised: 3 Apr 2013

See all articles by Marcus Jacob

Marcus Jacob

WHU - Otto Beisheim School of Management

Martin Jacob

WHU - Otto Beisheim School of Management

Date Written: July 4, 2012

Abstract

This paper investigates tax reasons for cross-sectional deviations from the general consensus in literature that a firm’s cash flow has a positive effect on dividend payout. We use a large multinational panel data set to show that the positive cash flow sensitivity of dividends is decreasing in dividend taxes.

Keywords: taxation, dividends, cash flow sensitivity

JEL Classification: G10, H24, H25

Suggested Citation: Suggested Citation

Jacob, Marcus and Jacob, Martin, Taxation and the Cash Flow Sensitivity of Dividends (July 4, 2012). Economics Letters, Vol. 118, No. 1, 2013, Available at SSRN: https://ssrn.com/abstract=2100300 or http://dx.doi.org/10.2139/ssrn.2100300