Corporate dividend smoothing: The role of cross-listing

Faruk Balli, Abraham Agyemang, Russell Gregory-Allen and Hatice Balli

Journal of Corporate Finance, 2022, vol. 72, issue C

Abstract: This paper examines how, and to what extent, cross-listing impacts corporate dividend smoothing. We report significantly increased dividend smoothing, with idiosyncratic sectoral responses, after cross-listing. Furthermore, we show that sectoral competition and local market development explain the extent of dividend smoothing after cross-listing. To study the dynamics in dividend smoothing channels after cross-listing, we adopt a variance decomposition approach. We find substantial variation in the use of debt and investment channels to absorb net income shocks, keeping dividends smooth after cross-listing. Our findings suggest that, with increased access to a larger pool of capital in the U.S., cross-listed firms are motivated to keep dividends stable through debt and investment decisions after cross-listing.

Keywords: Dividend smoothing; Lintner's partial adjustment model; Cross-listing; Dividend payout; Speed of adjustment (search for similar items in EconPapers)
JEL-codes: G15 G35 G38 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:72:y:2022:i:c:s092911992100273x

DOI: 10.1016/j.jcorpfin.2021.102151

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