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The study aims to examine the dividend omissions and dividend cuts behaviour of manufacturing and non-financial services firms to identify the determinants of dividend omissions and dividend cuts.

The study analyses the financial data of 3,546 firms from 2011 to 2020 (35,460 firm-year observations) using a dynamic random-effect probit panel regression model.

The results suggest that profitability, growth opportunity, leverage, liquidity, risk, extraordinary income, shareholding pattern and buyback are major determinants of dividend omissions. Similarly, dividend cut in the previous year, profitability, operating cash flow, risk and extraordinary income are major factors leading to dividend cuts.

Firms which omit the dividend are less likely to start paying dividend in subsequent years, whereas firms which cut the dividend may increase dividend in later years. Also, profitability decreases for a significant number of firms post dividend omission and cut. This indicates that dividend omission is a more prominent signal than a dividend cut for the financial health of a firm.

The determinants identified in the study enable analysts and portfolio managers to decide the propensity of dividend omission and cut even before actual announcements and can alleviate the significant loss in the portfolio. Also, managers and the board of directors would be able to monitor the firm’s financial performance to avoid the situation leading to dividend omissions and cuts.

The study strongly recommends that firms should voluntarily pay dividends to shareholders to encourage the healthy participation of retail shareholders in the equity market and create a long-term win–win situation for all stakeholders in society. If a large number of firms continue not to pay the dividend, the study appeals to the regulators to intervene to protect shareholders' interests for the greater good of society.

To the best of author’s knowledge, this is the first study to empirically identify the determinants of dividend omission and cut in the unique setting like India where dividend taxation had undergone a significant change.

This study aims to investigate the motivations behind the issuance of financial instruments with characteristics of equity (FICE), economic consequences associated with their issuance and accounting classifications based on a value-relevance approach.

Using a sample of 169 financial and nonfinancial firms from 10 jurisdictions that adopted International Financial Reporting Standards, the authors use a difference-in-differences econometric approach.

The findings reveal that FICE issuers are more leveraged companies with higher costs of equity and, in some cases, lower effective tax rates. This evidence corroborates the hypothesis that issuers of FICEs seek to increase their book values of equity (accounting treatment as equity) and, simultaneously, generate deductible expenses for tax purposes (tax treatment as liability).

This finding suggests that market participants do not treat these instruments as regular equity but rather as quasi-equity. The findings suggest that a binary classification of FICE as debt or equity may not be the accounting treatment that best represents the underlying economic substance of these contracts. Furthermore, this study reinforces the IASB indication regarding to increase the FICE disclosure to allow stakeholders to better understand the economic essence of these bonds.

This study assesses the economic outcomes and market evaluation of a specific type of FICE that has not been previously studied, which is similar to the examples provided by the IASB in their materials on the subject.

This study aims to investigate the association between the co-option of the chief financial officer (CFO) and dividend payments, assessing whether the talent of the CFO affects this association.

The empirical analyses were based on hand-collected data for 922 firm-year observations from 157 European listed firms, during the period 2013–2019. Empirical models, based on a two-step estimation procedure, involved the use of instrumental variables and the generalised moment method.

The results show that CFO co-option is negatively associated with the level of dividend payments. It was also found that the degree of CFO talent moderates the negative association between CFO co-option and dividend payments.

This investigation responds to the call for literature which examines how chief executive officer (CEO) – CFO relationships influence firms’ policies and outcomes. The study offers novel evidence for the individual-level characteristics of CFOs which are likely to reduce the effectiveness of CEO power and increase monitoring on corporate decisions on dividends.

The study sheds light on the effect of the interactions between CEOs and CFOs, which are important for investors’ expectations. In this regard, investors may be interested in the CFO profiles which may reduce CEO power over dividend policies.

Unlike previous research, which focused on CEOs, the authors are the first to shed light on the role of CFOs as key decision makers in influencing the dividend policies in modern corporations.

We examine how superstition shapes corporate tax avoidance and do so by taking a risk perspective and focusing on the zodiac-year belief prevalent in China.

We adopt a difference-in-differences research design to compare the degree of corporate tax avoidance in the CEOs’ zodiac year with that in the adjacent years. We do propensity-score matching to form a sample of Chinese listed firms for the regression analysis.

We find causal evidence that firms exhibit a greater magnitude of tax avoidance in the CEOs’ zodiac years, a result attributable to relatively weak tax enforcement in the Chinese context. We also find that the zodiac-year effect on corporate tax avoidance is more pronounced for firms with tight financial constraints, firms with high business risk, firms headquartered in regions with a high degree of superstition and non-state-owned firms.

This study is the first to show that superstition is a determinant factor of tax avoidance and contributes to the tax literature by shedding light on the behavioral risk factors that shape corporate tax avoidance. We take the perspective of CEOs’ risk appetite to analyze how tax avoidance is influenced by the CEOs’ trade-off between the costs and benefits of avoiding taxes. Our results suggest that, when CEOs are more risk-averse, they attach more importance to financial risk than the risk of reputational losses and litigation associated with corporate tax avoidance. The findings imply that tax avoidance can be curbed by increasing (or decreasing) the tax (financial) risk confronting the CEOs.

“The latest available cross-country data presented in the PEPPER V Report (Lowitzsch and Hashi, 2024) can be viewed by examining EFP in and of itself as an isolated subject or it can be viewed in a much wider set of contexts. Widening the lens in order to examine EFP in the context of the concentration of capital ownership and the concentration of capital income can help observers establish EFP’s span of relevance. In particular US data on capital income show that policy makers need to be aware that EFP can have an important role in narrowing the income and wealth gap for the working middle class when the concentration of capital ownership and capital income is high and when real wage growth is low.”

“Against this background, this article makes a very straightforward observation that the relevance of EFP in an economic system, in a country, and for the average employee in a country is related to the trend in the concentration of capital ownership and capital income. Interest in the idea is potentially increased or decreased by trends in real wages. Atkinson, who many consider the founder of modern wealth concentration scholarship, “focuses on the increasing share of capital incomes a source of income inequality among individuals” (Cirillo et al., 2017, p. 1). Indeed, we consider the difference between labour’s share and capital’s share to be a critically important fundamental problem of political economy. This essay asserts that when this concentration is high and real wages are flat, other things being equal, EFP may be more relevant. When the concentration of capital ownership and capital income is high, this means that ownership and income on that ownership is thinly spread in the population. When real wages are flat, this means that the rate at which fixed wages can replenish wealth is decreasing. As a result, both trends would make EFP more relevant.”

The conceptual model suggested for this article asserts that the relevance of EFP can be viewed as a function of narrowing income and wealth options for the working middle class when the concentration of capital ownership and capital income is high and when real wage growth is low. Does this relevance change across economic systems? There is no question that the future understanding of these issues requires adding metrics to the statistical methodologies of different regions and countries and adding to existing reports and analyses that focus on both the dynamics of and trends in capital income (property income in the EU) and on the EUR and USD value of EFP at the mean and at the median for different income levels of the population

This article presents – for the first time – a society-wide measure of the impact of EFP on one economy, namely, the US For further research, it makes sense to build on the comparable data available on the distribution of capital ownership and have similar research on the distribution of capital income for both the EU and the US along with measures of the EUR and USD values of EFP.

The theoretical basis for the case is information asymmetry and signaling theory, with buybacks providing a mechanism for reducing information asymmetry between management and investors. The controversy surrounding buybacks has led to political and regulatory scrutiny, which, consistent with evidence from academic research, may affect corporate behavior.

The compact case is based on secondary, public information about stock buybacks. All sources used are cited in-text, with full citations included in the references section at the end of the teaching note.

Stock buybacks, a means of providing returns to shareholders, have recently received increased scrutiny by politicians, media and shareholder activists. Proponents have argued that buybacks result in efficient allocation of capital by returning funds to shareholders, whereas opponents have criticized buybacks for enriching executives, providing tax advantages to shareholders and contributing to income inequality. Corporations did not curtail their use of buybacks after the Inflation Reduction Act of 2022 imposed an excise tax. The case frames the buyback debate in current events and focuses on the buyback activity of Apple. The case provides students the opportunity to analyze alternative ways that companies can provide returns to shareholders, evaluate impacts of buybacks on corporate stakeholders and appraise the reasons for, and implications of, current controversy regarding buybacks.

This compact case is appropriate for upper-level undergraduate or graduate courses in financial accounting, tax and finance. This case provides an opportunity to analyze and evaluate stock buyback decisions in the context of the current controversy related to buybacks.

The aim of this article is to assess the macroeconomic consequences of some specific aspects of financialization (i.e. share buy-back) using a hybrid post-Keynesian model of growth and distribution based on Kaldorian and Kaleckian characteristics.

The study follows a post-Keynesian approach and deals with financialization issues by implementing several numerical simulations.

The numerical simulations reveal the negative real impacts of massive share repurchases on the rate of accumulation because they immediately siphon off revenues directly intended for investment projects. Moreover, the negative effect of share buy-backs is reinforced especially when firms' investment decisions are more sensitive to a variation in retained earnings. Next, this macro-model also reproduces several well-known figures of the Kaleckian tradition and the paradox of costs.

The present article can be considered as a starting point for further theoretical extensions and requires empirical validation.

The Kaldor-Kalecki macro-model could be useful for policymakers who are interested in containing some of the negative excesses of financialization.

We develop a credit-risk model to study the informational role of investment in an economy susceptible to large liquidity shocks. Firms' investment decisions carry information about their asset quality, thereby mitigating informational frictions when firms enter bankruptcy. An increase in aggregate investment can reduce the informational value of investment, depressing firms' recovery values. Therefore, policies boosting investment can decrease debt and firm values by reducing the informational value of investment. The presence of debt overhang may enhance firm value by making firms' investment decisions more informative. We present suggestive empirical evidence consistent with model predictions on the relation between firms' investments and recovery rates.

The purpose of this paper is to examine the association between company reputation and dividend policy.

In this study, sample of 98,809 firm-year observations from 22 countries covering 2005–2016 were used.

Firm reputation concerns are associated with higher propensities to pay dividends and payout ratios. Further, this positive effect is more pronounced for firms with high free cash flows, high information asymmetry and low institutional monitoring. The results are robust to an instrumental variable approach, propensity score matching and the Heckman two-stage correction approach while addressing endogeneity concerns.

These findings have significant implications for various stakeholders, such as existing and potential investors, managers, policymakers and regulators, by providing insights into the relationship between corporate reputation and firm dividend payout decisions. Corporate reputation is highlighted as crucial for accessing finance, emphasizing the role of national regulators and policymakers in facilitating firms' efforts to improve their reputation. The study highlights the dynamics of corporate reputation and dividend payout, calling for proactive engagement from regulators and policymakers. Crafting policies conducive to reputation-building can enhance firms' financial prospects, indicating the need for strategic interventions at managerial, regulatory and policy levels. Understanding the influence of economic context is crucial for firms to tailor reputation management strategies and optimize funding opportunities in different economic environments.

Overall, results suggest that reputation serves as a disciplining mechanism, where firms will pay dividends to maintain their reputations.