The Impact of Investor Sentiment on Catering Incentives around the World

Jinho Byun, Kihun Kim, Rose C. Liao and Carrie Pan

Journal of International Financial Markets, Institutions and Money, 2021, vol. 71, issue C

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 Sentimen (search for similar items in EconPapers)
JEL-codes: G15 G35 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:71:y:2021:i:c:s1042443121000044

DOI: 10.1016/j.intfin.2021.101285

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