The DOI matches its Crossref record; 3 of the 3 references it cites were found in a registry or an index.
Payout Policy
Open accessAbstract
We survey the literature on payout policy, with a particular emphasis on developments in the past two decades. The cross-sectional empirical evidence for the traditional motivations behind firms paying out (agency, signaling, and taxes) is most persuasive with regard to agency considerations. Studies centered on the May 2003 dividend tax cut confirm that differences in the taxation of dividends and capital gains have only a second-order impact on setting payout policy. None of the three traditional explanations can account for secular changes in how payouts have been made over the past 30 years, during which repurchases have replaced dividends as the prime vehicle for corporate payouts. Other payout motivations, such as changes in compensation practices and management incentives, are better able to explain the observed variation in payout patterns over time than the traditional motivations. The most recent evidence suggests that further insights can be gained from viewing payout decisions as an integral part of a firm’s larger financial ecosystem, with important implications for financing, investment, and risk management.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cites
The Market for "Lemons": Quality Uncertainty and the Market Mechanism
Akerlof, G. A. (1970) · The Quarterly Journal of Economics · doi:10.2307/1879431 · Cited by 23,016
Corporate financing and investment decisions when firms have information that investors do not have
Myers, S. C., & Majluf, N. S. (1984) · Journal of Financial Economics · doi:10.1016/0304-405x(84)90023-0 · Cited by 18,957
Corporate Governance and Equity Prices
Gompers, P., Ishii, J., & Metrick, A. (2003) · The Quarterly Journal of Economics · doi:10.1162/00335530360535162 · Cited by 6,120
Flagged first, then by citations
Research works printed but not linked: 195
- 10.1007/s11142-007-9050-3 · DOI
- 10.1007/s11142-008-9068-1 · DOI
- 10.1111/j.1540-6261.1980.tb03466.x · DOI
- 10.1017/S0022109000002131 · DOI
- Akyol AC, 2014, Int. Rev., 14, 319
- 10.1111/0022-1082.00298 · DOI
- 10.1016/S1574-0102(03)01011-2 · DOI
- 10.1111/j.1540-6261.2004.00679.x · DOI
- Almeida H, Fos V, Kronlund M. 2013. The real effects of share repurchases. Work. Pap., Univ. Ill., Urbana-Champaign · DOI
- 10.1017/S0022109000002568 · DOI
- 10.1111/j.1540-6261.1997.tb03822.x · DOI
- 10.1111/j.1540-6261.2008.01430.x · DOI
- 10.1111/j.1540-6261.2011.01657.x · DOI
- 10.1017/S0022109012000312 · DOI
- 10.1016/B978-0-444-53265-7.50018-4 · DOI
- 10.1111/j.1540-6261.2004.00658.x · DOI
- 10.1016/S0304-405X(97)00041-X · DOI
- 10.1016/0304-405X(87)90027-4 · DOI
- 10.1016/0304-405X(88)90022-0 · DOI
- 10.1016/j.jfineco.2011.02.004 · DOI
- 10.2308/accr.2004.79.4.889 · DOI
- 10.1111/j.1540-6261.1997.tb02723.x · DOI
- Benoit D. 2013. Icahn raises Apple stake, urges $150 billion buyback: ‘There is nothing short term about my intentions,’ activist investor tells Tim Cook in letter.The Wall Street Journal, Oct. 15
- 10.1093/rof/rft028 · DOI
- 10.1016/j.jacceco.2003.10.006 · DOI
- 10.1111/1475-679X.00052 · DOI
- 10.1016/j.jempfin.2003.10.002 · DOI
- Bernheim BD, 1995, Am. Econ. Rev., 85, 532
- 10.1111/j.1540-6261.2009.01492.x · DOI
- 10.2307/3003330 · DOI
- 10.1111/j.1540-6261.2007.01258.x · DOI
- 10.1016/0304-405X(74)90006-3 · DOI
- Blouin JL, Raedy JS, Shackelford DA. 2004. The initial impact of the 2003 reduction in the dividend tax rate. Work. Pap., Univ. N. C. · DOI
- Bolton P, 1990, Am. Econ. Rev., 80, 93
- 10.1017/S0022109012000087 · DOI
- 10.1093/rfs/hht045 · DOI
- Bonaimé AA, Hankins KW, Jordan BD. 2014. Wiser to wait: Do firms optimally execute share repurchases?Work. Pap., Univ. Ky. · DOI
- 10.1016/j.jcorpfin.2013.03.003 · DOI
- 10.1111/j.1540-6261.2007.01226.x · DOI
- 10.1016/j.jfineco.2004.07.004 · DOI
- 10.1111/j.1755-053X.2008.00027.x · DOI
- 10.17310/ntj.2008.3.03 · DOI
- Brennan MJ, 1970, Natl. Tax J., 23, 417, 10.1086/NTJ41792223 · DOI
- 10.1016/0304-405X(83)90035-1 · DOI
- 10.1016/S0304-405X(01)00068-X · DOI
- 10.1111/j.1540-6261.2007.01261.x · DOI
- 10.1093/rfs/1.3.195 · DOI
- 10.1017/S0022109000003987 · DOI
- 10.1016/0304-405X(78)90033-8 · DOI
- Chemmanur T, Cheng Y, Zhang T. 2010. Why do firms undertake accelerated share repurchase programs?Work. Pap., Boston Coll. · DOI
- 10.1086/296493 · DOI
- Cheng Y, Harford J, Zhang T. 2010. Bonus-driven repurchases. Work. Pap., Fla. State Univ. · DOI
- Cheng Y, Zhang T. 2012. Does share buyback deter takeovers? From ex ante to ex post.Work. Pap., Fla. State Univ. · DOI
- Chetty R, 2005, Q. J. Econ., 120, 791
- 10.1257/000282806777211838 · DOI
- Clark D, Buckman R. 2000. Microsoft to resume buybacks to provide for employee options, prevent dilution.The Wall Street Journal, Aug. 8, p. B6
- 10.1111/j.1540-6261.1991.tb03750.x · DOI
- 10.1111/j.1540-6261.2011.01671.x · DOI
- 10.1093/rfs/hhg028 · DOI
- 10.1017/S0022109009090115 · DOI
- 10.1016/0304-405X(81)90010-6 · DOI
- 10.1111/j.1540-6261.1992.tb04685.x · DOI
- 10.1016/0304-405X(95)00850-E · DOI
- 10.1016/S0304-405X(03)00186-7 · DOI
- 10.1561/0500000020 · DOI
- 10.1016/j.jfineco.2005.07.005 · DOI
- 10.1016/0304-405X(95)00841-2 · DOI
- 10.1016/j.jfineco.2010.10.016 · DOI
- 10.1016/j.jfineco.2007.06.006 · DOI
- 10.1016/j.jfineco.2010.10.013 · DOI
- 10.1111/0022-1082.00038 · DOI
- 10.1007/s11142-011-9162-7 · DOI
- 10.1086/209646 · DOI
- 10.1016/j.jfineco.2007.11.007 · DOI
- Dittmar AK, 2014, J. Finance Econ.
- 10.1111/0022-1082.00292 · DOI
- Easterbrook FH, 1984, Am. Econ. Rev., 74, 650
- 10.2307/1927599 · DOI
- 10.1016/S0304-405X(98)00026-9 · DOI
- 10.1016/0304-405X(93)90023-5 · DOI · Paper page
- 10.1016/S0304-405X(01)00038-1 · DOI
- 10.1016/S0304-405X(01)00039-3 · DOI · Paper page
- 10.1086/500672 · DOI
- 10.1016/S0304-405X(97)80053-0 · DOI
- 10.1086/261976 · DOI
- 10.1016/j.jbankfin.2006.07.006 · DOI
- 10.1016/j.jfineco.2009.10.008 · DOI
- 10.1016/j.jcorpfin.2003.09.001 · DOI
- 10.2307/2490411 · DOI
- 10.1111/j.1540-6261.2008.01336.x · DOI
- 10.1111/j.1540-6261.2006.00873.x · DOI
- 10.1046/j.1540-6261.2003.00617.x · DOI
- 10.1016/S0304-405X(99)00019-7 · DOI
- 10.1111/j.1540-6261.2005.00765.x · DOI
- 10.2307/3003400 · DOI · Paper page
- 10.1111/1540-6261.00474 · DOI
- 10.1111/j.1540-6261.2004.00645.x · DOI
- 10.1086/339889 · DOI
- 10.1017/S0022109010000633 · DOI
- 10.1111/1475-679X.00053 · DOI
- 10.1016/S0304-405X(00)00062-3 · DOI
- 10.1093/rfs/hhq096 · DOI
- 10.1007/s11408-006-0011-9 · DOI
- 10.1016/0304-405X(88)90059-1 · DOI
- 10.1162/003355399556089 · DOI
- 10.1086/503648 · DOI
- 10.1016/0378-4266(90)90053-5 · DOI
- 10.1111/jofi.12050 · DOI
- 10.1093/rfs/hhn073 · DOI
- 10.1016/j.jfineco.2007.04.004 · DOI
- Hotchkiss ES, Lawrence S. 2007. Empirical evidence on the existence of dividend clienteles. Work. Pap., Boston Coll. · DOI
- 10.1016/j.jacceco.2005.10.002 · DOI
- 10.1017/S0022109000002805 · DOI
- 10.1093/rfs/hht043 · DOI
- 10.2307/2331319 · DOI
- 10.1016/0165-4101(95)00409-2 · DOI
- 10.1016/0304-405X(95)00826-Z · DOI
- 10.1111/0022-1082.00291 · DOI
- 10.2307/3665586 · DOI
- 10.1016/S0304-405X(00)00061-1 · DOI · Paper page
- 10.1016/S0304-405X(03)00189-2 · DOI
- Jensen MC, 1986, Am. Econ. Rev., 76, 323
- 10.1016/0304-405X(76)90026-X · DOI · Paper page
- 10.1111/j.1540-6261.2005.00783.x · DOI
- John K, Knyazeva A. 2006. Payout policy, agency conflicts, and corporate governance.Work. Pap., New York Univ. · DOI
- 10.1111/j.1540-6261.1985.tb02363.x · DOI
- Jones C. 2002. A century of stock market liquidity and trading costs. Work. Pap., Columbia Univ. · DOI
- 10.1111/j.1745-6622.2004.tb00676.x · DOI
- 10.1016/S0304-405X(01)00095-2 · DOI
- 10.1016/0304-405X(82)90014-9 · DOI
- 10.1111/j.1540-6261.1982.tb03598.x · DOI
- 10.2307/3666285 · DOI
- 10.1016/0304-405X(90)90047-4 · DOI
- 10.1016/j.jfineco.2004.09.001 · DOI
- 10.1093/rfs/8.3.817 · DOI
- 10.1111/j.1540-6261.2004.00693.x · DOI
- 10.1093/rfs/13.3.659 · DOI
- Kulchania M. 2012. Market microstructure changes around accelerated share repurchase announcements.Work. Pap., Marquette Univ. · DOI
- 10.1093/rfs/1.2.111 · DOI
- 10.1016/0304-405X(86)90032-2 · DOI
- 10.1111/j.1540-6261.1990.tb03698.x · DOI
- 10.2307/2330976 · DOI
- 10.1111/j.1540-6261.2012.01772.x · DOI
- Lambrecht BM, Myers SC. 2014. The dynamics of investment, payout and debt. Work. Pap. 2444949, SSRN · DOI
- 10.1111/0022-1082.00199 · DOI
- 10.1016/j.jacceco.2003.10.007 · DOI
- 10.1093/rfs/hhr072 · DOI
- 10.1017/S0022109000002210 · DOI
- Lintner J, 1956, Am. Econ. Rev., 46, 97
- 10.1016/0304-405X(79)90012-6 · DOI
- 10.1111/j.1540-6261.1980.tb02178.x · DOI
- 10.1111/j.1540-6261.1982.tb03565.x · DOI
- 10.1016/j.jfineco.2006.08.003 · DOI
- 10.1016/j.jfineco.2006.02.006 · DOI
- McKeon SB. 2013. Firm-initiated versus investor-initiated equity issues.Work. Pap., Univ. Or. · DOI
- Michaely R, 1991, J. Finance, 46, 845
- 10.1093/rfs/8.2.369 · DOI
- 10.1093/rfs/hhr108 · DOI
- 10.1111/j.1540-6261.1995.tb04796.x · DOI
- 10.2307/2331116 · DOI
- 10.1093/rfs/9.2.471 · DOI
- 10.1006/jfin.1996.0020 · DOI
- 10.2469/faj.v66.n6.4 · DOI
- Miller MH, 1987, Macroeconomics: Essays in Honor of Franco Modigliani, 37
- 10.1086/294442 · DOI · Paper page
- 10.1111/j.1540-6261.1985.tb02362.x · DOI
- 10.1086/261114 · DOI
- 10.1017/S0022109000003471 · DOI
- 10.1016/S1573-4463(99)30024-9 · DOI
- 10.1016/0304-405X(77)90015-0 · DOI · Paper page
- 10.1111/0022-1082.00400 · DOI
- 10.1093/rfs/hhh004 · DOI
- 10.1016/j.jcorpfin.2010.06.004 · DOI
- 10.1111/j.1540-6261.1983.tb02290.x · DOI
- 10.1111/j.1540-6261.1972.tb03018.x · DOI
- 10.1093/rfs/hhn024 · DOI
- 10.1016/j.jfineco.2004.02.003 · DOI
- 10.1257/0002828041301416 · DOI
- 10.1111/j.1540-6261.1984.tb04914.x · DOI
- 10.1016/j.jfineco.2007.12.001 · DOI
- 10.1017/S0022109010000694 · DOI
- 10.1086/338703 · DOI
- 10.2307/3003485 · DOI · Paper page
- 10.1093/rof/8.4.515 · DOI
- 10.1016/0304-405X(84)90025-4 · DOI
- 10.1007/s11142-008-9072-5 · DOI
- 10.1016/j.jfineco.2007.05.003 · DOI
- 10.1111/0022-1082.115194 · DOI
- 10.1016/0304-405X(81)90011-8 · DOI
- 10.1016/j.jfineco.2007.11.002 · DOI
- 10.1086/295525 · DOI
- Weisbenner SJ. 2000. Corporate share repurchases in the 1990s: What role do stock options play?Discuss. Pap. 2000-29, Finance Econ. Discuss. Ser. · DOI
- Yagan D. 2014. Capital tax reform and the real economy: the effects of the 2003 dividend tax cut.Work. Pap., UC Berkeley · DOI
- 10.2308/accr.00000024 · DOI
- Zwiebel J, 1996, Am. Econ. Rev., 86, 1197
Metadata
- Authors
- Farre-Mensa, J., Michaely, R., & Schmalz, M.
- Affiliations
- Harvard University (US)
- Reichman University (IL)
- University of Michigan (US)
- Venue
- Annual Review of Financial Economics
- Publisher
- Annual Reviews
- Published
- 2014-12-01
- Volume
- 6
- Issue
- 1
- Pages
- 75-134
- ISSN
- 1941-1367 (ISSN-L)
- 1941-1375
- OpenAlex
- W4241462179
- Cited by
- 224
- References
- 3
- Citations by year
- 2026: 15 · 2025: 30 · 2024: 17 · 2023: 22 · 2022: 21 · 2021: 28 · 2020: 31 · 2019: 20 · 2018: 12 · 2017: 15 · 2016: 7 · 2015: 4 · 2014: 1
- FWCI
- 4.97
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- Annual Review of Financial Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Taxation and Avoidance
- Keywords
- dividend policy, dividends, share repurchases, agency theory, signaling, dividend taxation, capital gains tax, executive compensation, managerial incentives, corporate payout decisions, corporate finance
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review