Dividend taxation and firm performance with heterogeneous payout responses
We analyze the short and long-run performance of firms that were differentially affected by a new tax on dividends in the lead-up to the Global Financial Crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to causally identify the policy imp...
| Main Authors: | , , |
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| Formato: | Internet publication |
| Idioma: | English |
| Publicado: |
2024
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| _version_ | 1826315341661208576 |
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| author | Bilicka, KA Güçeri, I Koumanakos, E |
| author_facet | Bilicka, KA Güçeri, I Koumanakos, E |
| author_sort | Bilicka, KA |
| collection | OXFORD |
| description | We analyze the short and long-run performance of firms that were differentially affected by a new tax on dividends in the lead-up to the Global Financial Crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to causally identify the policy impact. Consistent with intertemporal tax arbitrage, immediately-affected firms significantly reduce payouts. At a time of severe liquidity shortage, the average firm uses the undistributed cash to pay back debt. In the long run, the allocation of undistributed cash to investment, retained earnings, and debt repayment predicts growth and the likelihood of bankruptcy. |
| first_indexed | 2024-12-09T03:23:54Z |
| format | Internet publication |
| id | oxford-uuid:70c1567d-9e03-40e7-9f69-3d410c0616e7 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-12-09T03:23:54Z |
| publishDate | 2024 |
| record_format | dspace |
| spelling | oxford-uuid:70c1567d-9e03-40e7-9f69-3d410c0616e72024-11-25T15:12:03ZDividend taxation and firm performance with heterogeneous payout responsesInternet publicationhttp://purl.org/coar/resource_type/c_7ad9uuid:70c1567d-9e03-40e7-9f69-3d410c0616e7EnglishSymplectic Elements2024Bilicka, KAGüçeri, IKoumanakos, EWe analyze the short and long-run performance of firms that were differentially affected by a new tax on dividends in the lead-up to the Global Financial Crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to causally identify the policy impact. Consistent with intertemporal tax arbitrage, immediately-affected firms significantly reduce payouts. At a time of severe liquidity shortage, the average firm uses the undistributed cash to pay back debt. In the long run, the allocation of undistributed cash to investment, retained earnings, and debt repayment predicts growth and the likelihood of bankruptcy. |
| spellingShingle | Bilicka, KA Güçeri, I Koumanakos, E Dividend taxation and firm performance with heterogeneous payout responses |
| title | Dividend taxation and firm performance with heterogeneous payout responses |
| title_full | Dividend taxation and firm performance with heterogeneous payout responses |
| title_fullStr | Dividend taxation and firm performance with heterogeneous payout responses |
| title_full_unstemmed | Dividend taxation and firm performance with heterogeneous payout responses |
| title_short | Dividend taxation and firm performance with heterogeneous payout responses |
| title_sort | dividend taxation and firm performance with heterogeneous payout responses |
| work_keys_str_mv | AT bilickaka dividendtaxationandfirmperformancewithheterogeneouspayoutresponses AT gucerii dividendtaxationandfirmperformancewithheterogeneouspayoutresponses AT koumanakose dividendtaxationandfirmperformancewithheterogeneouspayoutresponses |