Flexible Firm-Level Dividends in Latin America

11 Pages Posted: 16 Feb 2017

See all articles by J. Henk von Eije

J. Henk von Eije

University of Groningen - Faculty of Economics and Business

Abhinav Goyal

University College Cork

Cal B. Muckley

University College Dublin

Date Written: January 20, 2017

Abstract

We show, for a sample of up to 757 industrial firms, in seven Latin American countries from 1994-2014, that these firms exhibit comparatively flexible payout behavior. Flexibility is defined in respect to (i) variability in firm payout status and amounts and (ii) parameters of the Lambrecht-Myers (2012) theory on the Lintner (1956) dividend equation. The results indicate that Latin American firms have higher speeds of adjustment and target payout ratios as well as lower rates of habit formation than found in the payout policies of United States firms. This note, thus, highlights an open question regarding conspicuously flexible payout policies in Latin American firms.

Keywords: G15, G32, G35, O16

JEL Classification: dividends; flexibility; Latin America

Suggested Citation

von Eije, J. Henk and Goyal, Abhinav and Muckley, Cal B., Flexible Firm-Level Dividends in Latin America (January 20, 2017). Finance Research Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2918857

J. Henk Von Eije

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Abhinav Goyal

University College Cork ( email )

O'Rahilly Building
College Road
Cork
Ireland
+353 (0)21 490 2839 (Phone)

Cal B. Muckley (Contact Author)

University College Dublin ( email )

Blackrock, Co. Dublin
Ireland
+353-1-716-8091 (Phone)

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