Peer Effects on Firm Dividend Policies in Taiwan

28 Pages Posted: 13 Nov 2020

See all articles by King Fuei Lee

King Fuei Lee

Schroder Investment Management

Date Written: September 25, 2020


With the dividend-paying culture increasingly taking hold in corporate Taiwan, this paper investigates the effects of industry peers on the corporate dividend policies in the country. By employing the instrument variable technique, we find strong evidence that the payout policies of Taiwanese firms are positively influenced by the policies of their industry peers. This peer influence tends to be stronger for companies operating in industries with lower product competition and higher information uncertainty, indicating that firms imitate the dividend policies of their peers for information-based reasons. Younger, smaller and harder-to-value companies are also more likely to mimic their larger, older and easier-to-value peers. Our findings are robust to alternative definitions of control variables, instrument variable and industry classifications.

Keywords: Dividend Policy, Peers Effect, Taiwan

JEL Classification: G35

Suggested Citation

Lee, King Fuei, Peer Effects on Firm Dividend Policies in Taiwan (September 25, 2020). Journal of Financial Studies, Vol. 28, No. 3, 2020, Available at SSRN: or

King Fuei Lee (Contact Author)

Schroder Investment Management ( email )


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