1. What are the future works in "How relevant is dividend policy under low shareholder protection?" ?
Importantly, this finding is unlikely to be specific to the Netherlands, and could thus be extended to other stakeholder-oriented governance regimes.
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2. What contributions have the authors mentioned in the paper "How relevant is dividend policy under low shareholder protection?" ?
This paper reopens the debate on the substitutability of dividends and shareholder control in mitigating free cash flow concerns, by examining dividend behavior when shareholder control is restricted in the firm.. The authors consider the stakeholder-oriented governance regime of the Netherlands, where shareholdings are concentrated, but shareholder rights are often severely restricted by a legally imposed governance regime and anti-shareholder devices such as Dutch-style poison pills.. The authors find that dividend payouts are generally low, unresponsive to earnings changes and show little relationship with size, leverage, and investment opportunities.. Once accounting for these, the authors find no evidence that strong shareholders would allow firms to relax their dividend policy, as has been proposed in the existing literature.
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3. What is the effect of preference shares on the payout propensity of firms?
the payout propensity of firms using preference shares declines rather than increases in ROA, which seems to be symptomatic of agency problems.
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4. What do Faccio et al. (2001) argue that rational investors may anticipate?
Faccio et al. (2001) argue that rational investors may anticipate expropriation and demand higher dividends from firms that are more likely to expropriate them.
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