Abstract
We examine state income and reputation incentives to account for the high dividends of privatized firms. Consistent with these agency-cost based incentives, we show strong and robust evidence that the extent of state ownership is positively related to corporate dividends. We distinguish between the empirical importance of these incentives using variation in the rule of law to protect minority shareholders, the fiscal deficit and the political orientation of the state. Our findings show that an incentive to enhance the state's reputation with minority shareholders can account for the high dividends of privatized firms.
| Original language | English |
|---|---|
| Article number | 101493 |
| Journal | Journal of Corporate Finance |
| Volume | 60 |
| DOIs | |
| Publication status | Published - Feb 2020 |
Bibliographical note
Funding Information:This manuscript was substantively advanced while Cal Muckley was a CRH Fulbright scholar at Yale University. Cal Muckley would like to acknowledge the financial support of Science Foundation Ireland under Grant Number 16/SPP/3347 and 17/SP/5447.
Funding Information:
This manuscript was substantively advanced while Cal Muckley was a CRH Fulbright scholar at Yale University. Cal Muckley would like to acknowledge the financial support of Science Foundation Ireland under Grant Number 16/SPP/3347 and 17/SP/5447 .
Publisher Copyright:
© 2019
Keywords
- Dividends
- Minority shareholders
- Payout policy
- Privatization
- State income
- State ownership
- State reputation
ASJC Scopus subject areas
- Business and International Management
- Finance
- Economics and Econometrics
- Strategy and Management