The COVID-19 Pandemic and Corporate Dividend Policy

Journal of Financial and Quantitative Analysis, Volume 56 (7), pp. 2389-2410, 2021

46 Pages Posted: 16 Apr 2020 Last revised: 27 Jul 2022

See all articles by Georg Cejnek

Georg Cejnek

ZZ Vermögensverwaltung GmbH

Otto Randl

Vienna University of Economics and Business

Josef Zechner

Vienna University of Economics and Business

Multiple version iconThere are 2 versions of this paper

Date Written: July 25, 2021

Abstract

This paper shows for major equity markets that the proportion of index values attributable to the first five years of dividends dropped substantially in the first quarter of 2020 and that this drop has not been reversed by the end of the year. In the cross-section, this breakdown of dividend smoothing due to COVID-19 was less severe for firms with higher operating cash flows and more positively co-skewed stock returns and more pronounced for those with higher leverage and in the financial sector. Heavy dividend cutters also experienced a substantial increase in exposure to systematic risk.

Keywords: COVID-19 pandemic, dividends

JEL Classification: G12, G35

Suggested Citation

Cejnek, Georg and Randl, Otto and Zechner, Josef, The COVID-19 Pandemic and Corporate Dividend Policy (July 25, 2021). Journal of Financial and Quantitative Analysis, Volume 56 (7), pp. 2389-2410, 2021, Available at SSRN: https://ssrn.com/abstract=3576967 or http://dx.doi.org/10.2139/ssrn.3576967

Georg Cejnek

ZZ Vermögensverwaltung GmbH ( email )

Coburgbastei 4, Top5
Vienna, 1010
Austria
+43151818934 (Phone)

Otto Randl (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Josef Zechner

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien A-1019
Austria

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