Hard Times or Greatr Expectations?: Dividend Omissions and Dividend Cuts by UK Firms

Andrew Benito and Garry Young
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Andrew Benito: Bank of England

No 21, Royal Economic Society Annual Conference 2002 from Royal Economic Society

Abstract: This paper uncovers an increasing proportion of quoted UK companies omitting cash dividends. Using a large panel of quoted UK companies, we estimate models for the incidence of dividend omissions and cuts as functions of financial characteristics including cash flow, leverage, investment opportunities, investment and company size. These variables account for most of the increase in omission since 1995. There is relatively little evidence to link this to the major tax reform of 1997 that abolished tax refunds on dividend income payable to tax exempt institutions. Significant persistence effects indicate companies are slow to adjust their balance sheets through dividends.

Date: 2002-08-29
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Related works:
Journal Article: Hard Times or Great Expectations? Dividend Omissions and Dividend Cuts by UK Firms (2003)
Working Paper: Hard Times or Great Expectations?: Dividend omissions and dividend cuts by UK firms (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:ecj:ac2002:21

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