Dividend smoothing when firms distribute most of their earnings as dividends

The Dividend Policies of Private Firms: Insights into Smoothing, Agency Costs, and Information Asymmetry

We compare the dividend policies of privatelyand publicly-held firms in order to examine Lintner’s (1956) model of dividends, as wells as more recent agency-based and informationbased explanations of observed dividend behavior. Our findings suggest that both public and private firms exhibit a strong aversion to dividend cuts and omissions; however, public firms adhere to a consistent policy of ...

Founding Family Ownership and Dividend Smoothing

This paper examines the relation between ownership structure and dividend smoothing by comparing the degree of dividend smoothing engaged in by family and non-family firms. We expect family firms to exhibit less dividend smoothing behaviour than non-family firms due to lower agency conflicts and less information asymmetry experienced by family firms. Based on a sample of S&P 500 firms from 1997...

Dividend Smoothing, Agency Costs, and Information Asymmetry: Lessons from the Dividend Policies of Private Firms

Dividend Smoothing and Predictability

The relative predictability of returns and dividends is a central issue because it forms the paradigm to interpret asset price variation. A little studied question is how dividend smoothing, as a choice of corporate policy, affects predictability. We show that even if dividends are supposed to be predictable without smoothing, dividend smoothing can bury this predictability. Because aggregate d...

Earnings and the Elusive Dividends of Health

The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. The Research Department (RES) publishes the Latin American Economic Policies Newsletter, as well as working papers and books, on diverse economic issues. To obtain a complete list of RES publications and read or d...