10 Pages Posted: 4 Jul 2012 Last revised: 3 Apr 2013
Date Written: July 4, 2012
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