Dividend Policy of State-Owned Firms – Evidence from German Municipally-Owned Corporations

Abstract

In this paper, we investigate the dividend policy of municipally-owned corporations in Germany. Based on the theoretical insights from corporation governance, and in particular based on the agency-cost and the information content hypotheses, we develop a testable empirical model, which extends Lintner’s corporate dividend policy model to the specifics of publicly-owned corporations. Exploiting an extensive and unique dataset on German municipally-owned corporations observed between 2003 and 2014, we provide evidence that supports our hypothesis that those corporations apply dividend policies similar to privately owned firms. We find that the corporations engage in dividend smoothing and that pay-outs to owners depend on their legal forms, ownership dispersion, and on the involvement of private shareholders.

About the presenter’s visit

Maria Nieswand will be visiting the School of Economics from 19.8.19 – 4.9.19.   While here she will be using room 635 Colin Clark Building.  If you would like to meet with her or have lunch or dinner with her please contact Professor Chris O’Donnell who will be her host while at The University of Queensland.  Professor O’Donnell can be contacted on c.odonnell1@uq.edu.au