Did dividend policy change during the financial crisis?
Abstract
Purpose
The purpose of this paper is to investigate whether corporate dividend policy changed during the financial crisis.
Design/methodology/approach
For this study, a life‐cycle model is used to predict the probability that a firm pays a dividend. The data sample for this research follows that of Fama and French and of DeAngelo et al., for the time period of 2006‐2009. The panel logistic regression analysis considers the firm cluster effects and the autoregressive correlation of the firm clusters.
Findings
This study shows evidence that the probability that a firm paid a dividend declined in 2008 and 2009, even after taking the firm's financial condition into account. Furthermore, the analysis also shows that dividend policy did shift during the financial crisis.
Originality/value
The results of this study show that dividend policy did shift during the financial crisis. The research provides evidence that firms placed additional emphasis on financial viability after the financial crisis.
Keywords
Citation
Hauser, R. (2013), "Did dividend policy change during the financial crisis?", Managerial Finance, Vol. 39 No. 6, pp. 584-606. https://doi.org/10.1108/03074351311322861
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited