Common ownership and firm dividend policies

Alberta Di Giuli, Egle Karmaziene, Naciye Sekerci

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Abstract

This paper examines the relationship between common owners and firm dividend policy. We find that dividend policies of firms newly added to an investor's portfolio evolve towards the dividend policies of the existing firms in this portfolio. This relationship is neither driven by owners targeting firms forecasted to change their dividend policies, nor by firms with a similar dividend strategy to the companies in the new investor's existing portfolio. Our results suggest that owners have a dividend policy style, and that their influence depends on the type of co-owner and the existing governance characteristics of the co-purchased firm.
Original languageEnglish
Article number101779
Pages (from-to)1-8
Number of pages8
JournalFinance Research Letters
Volume40
Early online date28 Sept 2020
DOIs
Publication statusPublished - May 2021

Funding

For comments, we thank the brownbag participants at Groningen University, ESCP Paris, the 2018 AFFI Conference, Corporate Finance Day (Antwerp), European Financial Management Association 2019 Annual Meeting. Di Giuli gratefully acknowledges financial support from LabEx ReFi. Sekerci thanks Swedish House of Finance (SHoF) for providing an excellent research environment during her visit when she hand-collected the ownership data from the database offered by SIS Ägarservice AB. This database has been run by Modular Finance AB Holdings since 2016, and is called “Modular Finance AB” throughout the paper. We also thank research assistant, Oskar Stigland, for his excellent work on conducting a portion of the data collection, and Knut Wicksell Center for Financial Studies at Lund University for funding. For comments, we thank the brownbag participants at Groningen University, ESCP Paris, the 2018 AFFI Conference, Corporate Finance Day (Antwerp), European Financial Management Association 2019 Annual Meeting. Di Giuli gratefully acknowledges financial support from LabEx ReFi. Sekerci thanks Swedish House of Finance (SHoF) for providing an excellent research environment during her visit when she hand-collected the ownership data from the database offered by SIS Ägarservice AB. This database has been run by Modular Finance AB Holdings since 2016, and is called “Modular Finance AB” throughout the paper. We also thank research assistant, Oskar Stigland, for his excellent work on conducting a portion of the data collection, and Knut Wicksell Center for Financial Studies at Lund University for funding.

FundersFunder number
European Financial Management Association
Knut Wicksell Center for Financial Studies at Lund University
LabEx ReFi
SIS Ägarservice AB
Swedish House of Finance
Rijksuniversiteit Groningen

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