Ownership Structure, Tax Regime, and Dividend Smoothing: International Evidence

38 Pages Posted: 3 Sep 2012 Last revised: 14 Feb 2014

Date Written: February 14, 2014

Abstract

We investigate dividend smoothing behaviors of approximately 6,000 firms from 28 countries. The data find a wide variation in the extent of dividend smoothing across countries, while US firms smooth dividends the most. Firms with a concentrated ownership structure adjust their dividends quickly, especially when the target dividend level is lower than dividends of previous years. Companies located in a classical tax system have lower target dividend levels and in turn smooth dividends more than companies in a partial or full imputation system. These results suggest US firms adjust their dividend payments only slowly due to the dispersed ownership structure and tax system.

Keywords: Dividend smoothing, Ownership structure, Tax, International

JEL Classification: G32, G35

Suggested Citation

Shinozaki, Shinya and Uchida, Konari, Ownership Structure, Tax Regime, and Dividend Smoothing: International Evidence (February 14, 2014). Midwest Finance Association 2013 Annual Meeting Paper; Asian Finance Association (AsianFA) 2014 Conference Paper. Available at SSRN: https://ssrn.com/abstract=2139897 or http://dx.doi.org/10.2139/ssrn.2139897

Shinya Shinozaki

Kyushu University ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan

Konari Uchida (Contact Author)

Kyushu University ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan
+81-92-642-2463 (Phone)

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