Dividend payments as a response to peer influence

Jillian Grennan

Journal of Financial Economics, 2019, vol. 131, issue 3, 549-570

Abstract: I show dividend policies have peer effects. My estimates indicate that firms speed up the time taken to make a dividend change by about 1.5 quarters and increase payments by 16% in response to peer changes. The peer effects matter in increases but not decreases. In contrast to dividends, repurchases show no peer effects. In addition, announcement returns indicate that investors partially anticipate the consequences of peer effects. Overall, peer interdependencies account for 12% of total dividend payments.

Keywords: Dividends; Payout; Repurchases; Peer effects; Announcement returns (search for similar items in EconPapers)
JEL-codes: C31 D22 G14 G35 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (92)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:131:y:2019:i:3:p:549-570

DOI: 10.1016/j.jfineco.2018.01.012

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