Dividend policy and the takeover market: Half a century of evidence
Issued Date
2025-03-01
Resource Type
ISSN
02755319
Scopus ID
2-s2.0-85216626206
Journal Title
Research in International Business and Finance
Volume
75
Rights Holder(s)
SCOPUS
Bibliographic Citation
Research in International Business and Finance Vol.75 (2025)
Suggested Citation
Chintrakarn P., Chatjuthamard P., Jiraporn P., Kyaw K. Dividend policy and the takeover market: Half a century of evidence. Research in International Business and Finance Vol.75 (2025). doi:10.1016/j.ribaf.2025.102774 Retrieved from: https://repository.li.mahidol.ac.th/handle/20.500.14594/104200
Title
Dividend policy and the takeover market: Half a century of evidence
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Author's Affiliation
Corresponding Author(s)
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Abstract
We study the effect of a key external governance mechanism – the takeover market – on dividend policy. We employ a unique measure to assess vulnerability to corporate takeovers derived from the varied enactment of legislation across different states. Using an extensive dataset spanning half a century and all state regulations, we demonstrate that firms more susceptible to takeover threats pay significantly higher dividends. Our results support agency theory, which postulates that the takeover market compels self-serving managers to return more cash to shareholders through higher dividends.