Heterogeneity in corporate payouts

Abstract

In this paper we empirically investigate dividends and repurchases of the UK, and the overarching pattern reveals that their determinants are more driven by payout size than they are by payout type. The overall corporate payout policy is influenced by the operating performance and tax framework. Aggregately, the determinants of dividends and repurchases are heterogenous, and for each payout's individual testing the determinants have shown varying influences when controlled for payout size; small, medium and large. Comparatively, the determinants of dividends and repurchases of small size show homogeneity, while those of medium and large sizes exhibit heterogeneity. From a variable-specific perspective, aggregately dividends are positively influenced by asset holdings and ROA, and negatively influenced by independent directions and EPS. While aggregately repurchases are positively influenced by debt exposure and negatively influenced by M/B Ratio.

Keywords

• Dividends
• Repurchases
• Determinants