Does stock market liquidity affect dividends?

被引:5
作者
Michaely, Roni [1 ]
Qian, Meijun [2 ]
机构
[1] Univ Hong Kong, Fac Business & Econ, Hong Kong, Peoples R China
[2] Zhejiang Univ, Int Business Sch, Hangzhou, Peoples R China
关键词
Liquidity; Dividends; Governance; Clientele; Payout policy; SHARE STRUCTURE REFORM; PROPENSITY; POLICIES;
D O I
10.1016/j.pacfin.2022.101788
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Using two exogenous shocks, we examine the causal impact of stock liquidity on firms' dividend policy. Both the first shock, the reduction of the minimum tick size from 1/16 to decimals in the US, and the second shock, the mandatory conversion of non-traded stocks to traded stocks in China, changed the liquidity of affected stocks. We find, in both experiments, that increased stocks liquidity results in a significant reduction in dividends. Our empirical design enables us to control for asset liquidity, investment changes, and other omitted factors that might affect firms' dividend policy. We conclude that when firms set dividend policies, satisfying investors' liquidity needs is a significant factor.
引用
收藏
页数:20
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