Beschreibung:
In this study we explore the link between climate risk and corporate dividend smoothing using a large international sample of listed firms between 2005-2019. We document a negative economically significant relationship which amplifies in the presence of high growth opportunities and low financing capabilities. Moreover, our analysis shows that climate risk decreases the likelihood of dividend payments and increases the propensity for dividend changes and omissions. Findings are robust to several alternative measures of dividend smoothing and climate risk, and estimation techniques that address endogeneity and confounding effects originating from sample composition. Taken together, our findings indicate that firms, vis-a-vis climate risk, prioritize investments over dividends and thus depart from past dividend smoothing practices towards a more flexible payout regime