Smoothed or not smoothed: The impact of the 2008 global financial crisis on dividend stability in the UK

This study examines the cash dividend behaviour of a panel dataset 1,178 firms traded in London Stock Exchange (LSE) for period 2008–2017. Using modified version Lintner's (1956) partial adjustment model, it attempts to ascertain whether they follow stable policy and how 2008 global financial crisis affects stability UK. The results general show that LSE have long-term payout ratios slowly adjust their dividends target as suggested by Lintner. findings also detect negative impact on payments tendency immediately response earnings changes first five-year 2008–2012. More specifically, despite credit crunch volatile earnings, UK set high rates but adopt policies with serious degree smoothing early years. When UK-listed better chance recover from initial crisis, however even higher distribute much more smoothed (exhibiting stability) over second 2013–2017.