Beschreibung:
We document changes in aggregate dividend payments by Canadian firms over the period 1989-2021, which covers both the “disappearing” (1989-2002) and the reappearing periods (2003-2021) previously noted for U.S firms. In Canada, the changes are mainly driven by the changes in the number of listed firms, particularly firms in the energy and mining sectors, the bursting of the Internet Bubble, the effects of the global financial crisis and unique policy changes in Canada concerning the taxation of income trusts. Unlike the experience in the US, where the number of dividend-paying firms declined to the extent that share repurchasing firms outnumbered dividend-paying firms, this has not been the case in Canada. Instead, both the number of dividend-paying firms is consistently higher throughout the sample period, while the number and percentage of repurchasing firms remains low. Of significance is that life-cycle theory as measured by the amount of cumulative retained earnings on a firm’s balance sheet plays an important role in explaining the dividend status of Canadian firms. Changes in the percentage of dividend paying firms can then be attributed to both changing firm characteristics and a changing propensity to pay a dividend