The Impact of Investor Sentiment on Catering Incentives around the World

Posted: 12 Apr 2021

See all articles by Kihun Kim

Kihun Kim

University of Missouri - Columbia

Jinho Byun

Ewha Womans University - College of Business Administration

Rose C. Liao

Rutgers University, Newark, School of Business-Newark, Department of Finance & Economics

Carrie H. Pan

Santa Clara University - Department of Finance

Date Written: January 8, 2021

Abstract

This study tests catering theory of dividend policies in twenty-one countries from 1991 to 2017. First, we show that there are important differences in corporate dividend policies across countries. Second, we find that the catering incentive is stronger when investor sentiment is low. Third, firms domiciled in countries with strong legal protections for investors are more likely to catering to investors, especially when investor sentiment is low. Our findings shed light to the factors contributing to the fluctuations in dividend catering around the world.

Keywords: Dividend Policy,International Catering, Investor Protection, Investor Sentiment

JEL Classification: G35,G15

Suggested Citation

Kim, Kihun and Byun, Jinho and Liao, Rose C. and Pan, Carrie H., The Impact of Investor Sentiment on Catering Incentives around the World (January 8, 2021). Journal of International Financial Markets, Institutions and Money, Vol. 71, No. 101285, 2021, Available at SSRN: https://ssrn.com/abstract=3762724

Kihun Kim (Contact Author)

University of Missouri - Columbia ( email )

Columbia, MO 65203
United States

Jinho Byun

Ewha Womans University - College of Business Administration ( email )

Seoul 120-750
Korea, Republic of (South Korea)
822 3277-3971 (Phone)
822 3277-2835 (Fax)

Rose C. Liao

Rutgers University, Newark, School of Business-Newark, Department of Finance & Economics ( email )

1 Washington Park
Newark, NJ 07102
United States

Carrie H. Pan

Santa Clara University - Department of Finance ( email )

Santa Clara, CA 95053
United States
(408)5517188 (Phone)

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