Import competition and disappearing dividends

Jun Zhou, Laurence Booth and Bin Chang
Additional contact information
Jun Zhou: Rowe School of Business, Dalhousie University, Halifax, Canada
Laurence Booth: Rotman School of Management, University of Toronto, Toronto, Canada

Journal of International Business Studies, 2013, vol. 44, issue 2, 138-154

Abstract: Import competition has had an enormous impact on the US economy. This paper looks at whether such competition has increased the risk of US firms and is a factor that can partly explain the Fama–French disappearing dividends phenomenon. We show that firms facing more import competition do face more uncertainty in their future performance, and are less likely to pay a dividend. Import penetration through a risk channel has significant explanatory power, even after we include a variety of controls suggested in the literature, as well as Herfindahl index that controls for market power. Further, we can explain a significant part of the disappearing dividends phenomenon. Finally, we also find evidence that import competition contributes to the substitution of share repurchases for cash dividends. We are the first to document the impact that increased import competition and “globalization” have had on the dividend policy of US firms.

Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://www.palgrave-journals.com/jibs/journal/v44/n2/pdf/jibs201236a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jibs/journal/v44/n2/full/jibs201236a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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:pal:jintbs:v:44:y:2013:i:2:p:138-154

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().