Publicação
Essays on European banks dividend policy and ownership: An agency theory perspective
| Resumo: | An important area of emphasis in research over the past decades has been the dividend puzzle. This problem has occupied the attention of financial economists since Miller and Modigliani (1961) seminal work. In a frictionless world, when the investment policy of a firm is held constant, its dividend policy has no consequences for shareholders wealth. Thus, higher dividends lead to lower retained earnings and capital gains, leaving total shareholders’ wealth unchanged. Contrary to Miller and Modigliani’s prepositions, corporations follow deliberate dividend payout strategies (Lintner, 1956). This evidence raises a question: why firms pay dividends? Despite much study, researchers still do not have all the answers to the dividend puzzle. The literature points to various theories such as taxes and clientele effects, agency costs, asymmetric information, behaviour, life cycle, and catering. Often forgotten in the dividend literature, European banks are particularly important as they represent almost 20% of the total European market capitalization (as of 2023). They also merit a separate analysis as they have high leverage ratios, deposit insurance (both of which might provide equity holders, or managers, with perverse incentives), and different levels of information asymmetry that can provide a rationale for distinct dividend policies and clienteles. This Ph.D. thesis aims to study the dividend policy of European Banks from an agency cost theory perspective. For that purpose, we present a broad literature review and three empirical essays that provide new evidence on this particular topic. The first essay provide evidence regarding the relationship between the dividend policy of European banks and their ownership structure from a shareholder nationality point of view. The second essay documents the influence of government ownership in the dividend policy of European Bank, and finally, the third essay, provide new evidence concerning the recent COVID-19 crisis and bank dividends in Europe. The three empirical analyses are conducted using a comprehensive panel data sample of 221 banks, from 31 European countries, covering the 2007-2021 period. In this period, we identified a total of 75.655 shareholders, including information such as their ownership share position, investor type, sector classification and country of origin. |
|---|---|
| Autores principais: | Sacadura, José Nuno Teixeira de Abreu Albuquerque |
| Assunto: | Dividend policy Ownership Agency theory Dividendos Estrutura acionista Teoria da agência |
| Ano: | 2024 |
| País: | Portugal |
| Tipo de documento: | tese de doutoramento |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | ISCTE |
| Idioma: | inglês |
| Origem: | Repositório ISCTE |
| Resumo: | An important area of emphasis in research over the past decades has been the dividend puzzle. This problem has occupied the attention of financial economists since Miller and Modigliani (1961) seminal work. In a frictionless world, when the investment policy of a firm is held constant, its dividend policy has no consequences for shareholders wealth. Thus, higher dividends lead to lower retained earnings and capital gains, leaving total shareholders’ wealth unchanged. Contrary to Miller and Modigliani’s prepositions, corporations follow deliberate dividend payout strategies (Lintner, 1956). This evidence raises a question: why firms pay dividends? Despite much study, researchers still do not have all the answers to the dividend puzzle. The literature points to various theories such as taxes and clientele effects, agency costs, asymmetric information, behaviour, life cycle, and catering. Often forgotten in the dividend literature, European banks are particularly important as they represent almost 20% of the total European market capitalization (as of 2023). They also merit a separate analysis as they have high leverage ratios, deposit insurance (both of which might provide equity holders, or managers, with perverse incentives), and different levels of information asymmetry that can provide a rationale for distinct dividend policies and clienteles. This Ph.D. thesis aims to study the dividend policy of European Banks from an agency cost theory perspective. For that purpose, we present a broad literature review and three empirical essays that provide new evidence on this particular topic. The first essay provide evidence regarding the relationship between the dividend policy of European banks and their ownership structure from a shareholder nationality point of view. The second essay documents the influence of government ownership in the dividend policy of European Bank, and finally, the third essay, provide new evidence concerning the recent COVID-19 crisis and bank dividends in Europe. The three empirical analyses are conducted using a comprehensive panel data sample of 221 banks, from 31 European countries, covering the 2007-2021 period. In this period, we identified a total of 75.655 shareholders, including information such as their ownership share position, investor type, sector classification and country of origin. |
|---|