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The shareholder base and payout policy


Bodnaruk, Andriy; Östberg, Per (2013). The shareholder base and payout policy. Journal of Financial and Quantitative Analysis, 48(3):729-760.

Abstract

We examine the relation between the shareholder base and payout policy. Consistent with the idea that the shareholder base is related to the cost of external financing we find that firms with small shareholder bases have lower payout levels and maintain higher cash holdings. We show that undertaking an open market repurchase results in a significant reduction in the size of the shareholder base. Consequently, we find that firms with small shareholder bases are less likely to undertake a repurchase (reduce the shareholder base even further) and are more likely to pay special dividends.

Abstract

We examine the relation between the shareholder base and payout policy. Consistent with the idea that the shareholder base is related to the cost of external financing we find that firms with small shareholder bases have lower payout levels and maintain higher cash holdings. We show that undertaking an open market repurchase results in a significant reduction in the size of the shareholder base. Consequently, we find that firms with small shareholder bases are less likely to undertake a repurchase (reduce the shareholder base even further) and are more likely to pay special dividends.

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28 citations in Scopus®
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203 downloads since deposited on 19 Mar 2013
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Accounting
Social Sciences & Humanities > Finance
Social Sciences & Humanities > Economics and Econometrics
Scope:Discipline-based scholarship (basic research)
Language:English
Date:June 2013
Deposited On:19 Mar 2013 08:33
Last Modified:09 Apr 2024 01:36
Publisher:Cambridge University Press
ISSN:0022-1090
Additional Information:Copyright: Cambridge University Press.
OA Status:Green
Publisher DOI:https://doi.org/10.1017/S0022109013000252
Related URLs:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1107118
Other Identification Number:merlin-id:4878
  • Content: Accepted Version
  • Language: English
  • Content: Published Version
  • Language: English
  • Description: Nationallizenz 142-005