This paper investigates the determinants and future performances of non-dividend payers with high profitability compared to those with low profitability in the U.S. ‘Voluntarily lower dividend paying’ firms are defined as the ones whose incomes are above the median and yet whose dividend payouts are below the median in a given industry and a given year (or, HILND: High Income Low or No Dividend). Signaling model, agency model, residual dividend model, life cycle model explain the relations between firm characteristics and dividend payouts. This paper builds upon these models and, controlling for all the variables so far known, additionally examines CEO overconfidence and market competition. We discover that CEO overconfidence, as well as its interaction with CEO ownership, affects HILND positively. Young, small firms with more growth opportunities are more likely to perform HILND. Moreover, HILND policy relates positively to capital expenditures on fixed assets, but negatively to capital expenditures on R&D which is intangible and risky. Firm risk has nothing to do with HILND. Higher market competition leads to more HILND decisions, which supports the substitution model rather than the outcome model of market competition and dividend. Finally, HILND firms have better market and operating performance.
Key words: Dividends policy, CEO overconfidence, Market competition
[2016년 제 2차] Why Lucrative Firms do not Pay Dividends?
작성자 : 관리자
조회수 : 1091
게시일 :
2016-06-03