Dividends and Dominant Corporate Shareholders

47 Pages Posted: 29 Nov 2003

See all articles by Michael J. Barclay

Michael J. Barclay

University of Rochester - Simon School (Deceased)

Clifford G. Holderness

Boston College - Department of Finance

Dennis P. Sheehan

Pennsylvania State University

Date Written: December 16, 2003

Abstract

It is widely held that for tax reasons corporate shareholders are the only shareholders that prefer dividends to capital gains. This has led to clientele models where corporate blockholders migrate to firms paying dividends and use their voting power to increase dividends in these firms. We use panel data and trades of large blocks of stock to investigate these propositions. Although one-third of firms have corporate blockholders, we find no evidence that dividends are higher in these firms; that corporate blockholders are attracted to dividend-paying-firms; or that dividends increase after a corporation buys a large block of stock.

Suggested Citation

Barclay, Michael J. and Holderness, Clifford G. and Sheehan, Dennis P., Dividends and Dominant Corporate Shareholders (December 16, 2003). Available at SSRN: https://ssrn.com/abstract=472201 or http://dx.doi.org/10.2139/ssrn.472201

Michael J. Barclay (Contact Author)

University of Rochester - Simon School (Deceased)

N/A

Clifford G. Holderness

Boston College - Department of Finance ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States
617-552-2768 (Phone)
617-277-8071 (Fax)

Dennis P. Sheehan

Pennsylvania State University ( email )

Smeal College of Business
University Park, PA 16802
United States
814-863-8512 (Phone)
814-865-3362 (Fax)

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