Does the catering theory of dividend apply to the French listed firms?

Kamal Anouar () and Nicolas Aubert ()
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Kamal Anouar: GRM - Groupe de Recherche en Management - EA 4711 - UNS - Université Nice Sophia Antipolis (1965 - 2019) - IAE Toulon - Institut d'Administration des Entreprises (IAE) - Toulon - UTLN - Université de Toulon

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Abstract: This paper tests the catering theory of dividend in the French market. It investigates how prevailing investor's demand for dividend payers proxied by the dividend premia affects the dividend policy. The dividend premia are measured at the market level and at the firm level. We find that the market demand for dividends measured by dividend premia affects the decision to start, to continue or to omit to pay dividends and the decision to increase the dividends. However, catering theory does not seem to affect the magnitude of the dividend changes since most results are not significant.

Keywords: Behavioral corporate; finance; Dividends; Payout policy; Catering; Dividend premium; Behavioral corporate finance JEL code: G02; G35 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-bec
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01401867v2
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Published in Bankers Markets & Investors : an academic & professional review, 2016, 145

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Journal Article: Does the Catering Theory of Dividend Apply to the French Listed Firms? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01401867

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