Published in:Forthcoming, Financial History Review
Extent:
1 Online-Ressource (44 p)
Language:
English
DOI:
10.2139/ssrn.3439820
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 20, 2019 erstellt
Description:
This paper investigates the determinants of Dutch firms' dividend policies in the 20th century. We identify three distinct episodes and document shifts in dividend policies in the 1930s and 1980s, because firm managers cater to the changing preferences of shareholders. The first episode, prior to the Second World War, was characterized by dividends that were fixed contracts between shareholder and management and the payouts were mechanically determined by earnings. The second epoch of Dutch dividend policy, until the 1980s, was characterized by dividend smoothing. Dividends were still strongly related to earnings, but because of shareholder's preferences for stable dividend income, earnings changes are incorporated in dividends with a lag. Finally, dividend policy in the most recent episode is inspired by shareholder wealth maximization, based on agency and signalling motives. In this period, dividends have become largely decoupled from earnings