Work

Aggregate Dividend Behavior and Permanent Earnings Hypothesis

Year: 2001

Type: article

Abstract: The study examines the aggregate dividend behavior of U.S. corporations based on the permanent earnings hypothesis. Using annual data of aggregate earnings and dividends from 1871–1993, I find that although managers change dividends proportional to permanent earnings changes, they make revisions with a larger percentage change in dividends than in permanent earnings. The results from the post‐war data show that firms follow a partial adjustment policy with a long‐term dividend payout target in mind and make revisions with a delay. The quarterly data analysis yields results similar to those of the post‐war annual data.

Source: Financial Review

DOI: 10.1111/j.1540-6288.2001.tb00002.x

Author: Ming‐Shiun Pan

Institution: Shippensburg University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2133637460

FWCI: 3.042

Cites: 42

Cited by: 17

Related to: 10