Taxation, Dividends, and Share Repurchases: Taking Evidence Global

Martin Jacob ()
Additional contact information
Martin Jacob: Uppsala Center for Fiscal Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

No 2010:10, Working Paper Series, Center for Fiscal Studies from Uppsala University, Department of Economics

Abstract: We compile a comprehensive international dividend and capital gains tax data set to study tax explanations of corporate payouts for a panel of 5,767 firms from 25 countries for 1990-2008. We find robust evidence that the tax penalty on dividends versus capital gains is statistically significant and negatively related to firms’ propensity to pay dividends, initiate such payments, and the amount of dividends paid. Our analysis further reveals that an increase in the dividend tax penalty raises firms’ likelihood to repurchase shares, initiate such repurchases, and the amount of shares repurchased. This is strong confirming evidence that when listed industrial firms globally design their payout policies, they take into careful consideration the relative tax implications of their payout choices.

Keywords: Taxation; Dividends; Stock Repurchases; Payout Policy (search for similar items in EconPapers)
JEL-codes: G10 G15 G30 G35 H24 H25 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-09-22
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ucfs.nek.uu.se/digitalAssets/129/129576_wp201010.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://ucfs.nek.uu.se/digitalAssets/129/129576_wp201010.pdf [301 Moved Permanently]--> https://ucfs.nek.uu.se/digitalAssets/129/129576_wp201010.pdf [301 Moved Permanently]--> https://www.uu.se/institution/nationalekonomiska/forskning/forskningscentrum/uppsala-center-for-fiscal-studies/digitalAssets/129/129576_wp201010.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:uufswp:2010_010

Access Statistics for this paper

More papers in Working Paper Series, Center for Fiscal Studies from Uppsala University, Department of Economics Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Katarina Grönvall ( this e-mail address is bad, please contact ).