Institutional Holdings and Payout Policy
نویسندگان
چکیده
We examine the relation between institutional holdings and payout policy in U.S. public firms between 1980 and 1996. We find that payout policy affects institutional holdings. Institutions avoid firms that do not pay any dividends. But among dividend paying firms, they prefer firms that pay fewer dividends. Our evidence indicates that institutions prefer firms that repurchase shares, and regular repurchasers over non-regular repurchasers. We do not find that higher institutional holdings or a concentration of holdings causes firms to increase their dividends, their repurchases, or their total payout. Our results do not support models that predict that high dividends attract institutional clientele, or models that predict that institutions cause firms to increase payout.
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