Local peer influence on dividend payout decisions

Joshua Cave and Sandra Lancheros

Journal of Banking & Finance, 2024, vol. 164, issue C

Abstract: Using a large sample of US-listed firms, we examine how firms’ dividend payout decisions are influenced by the dividend policies of their local peers. We find that the decisions to increase and decrease dividends are both influenced by the payout choices of firms headquartered in the same locality. We show that local peer effects are driven by the desire to compete for local dividend clineteles, with local peer effects proving more pronounced in geographies with greater retail investors clienteles, institutional-tax clienteles, and agency-cost clienteles. In contrast to dividends, share repurchases are not influenced by local peer repurchase decisions. Our findings prove robust to various sampling methods, peer portfolios, model specifications, and estimation techniques.

Keywords: Dividend payouts; Local peer effects; Local dividend clienteles (search for similar items in EconPapers)
JEL-codes: D22 G30 G35 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426624001237
Full text for ScienceDirect subscribers only

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:eee:jbfina:v:164:y:2024:i:c:s0378426624001237

DOI: 10.1016/j.jbankfin.2024.107206

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().