Chikashi Tsuji
This paper explores the determinants of the dividend policy of firms in the Japanese electrical appliances industry. First, our empirical investigations reveal that in this industry, corporate managers do not cater to investors’ demands in both their dividend initiation and continuation decisions. Instead, in the Japanese electrical appliances industry, the determinants of firms’ dividend policies are value-weighted dividend yields, valueweighted nonpayers’ size, and value-weighted after-tax earnings-to-total-asset ratios. Moreover, cross-sectionally, this paper finds relations between corporate earnings and firm dividend payments in general. However, on an aggregate time-series basis, dividend payments tend to decrease company earnings in the Japanese electrical appliances industry, and this means rejection of the traditional signaling hypothesis.
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