What If Dividends Were Tax-Exempt? Evidence from a Natural Experiment

• 成果类型: Article
• 署名作者: Isakov, Dusan; Perignon, Christophe; Weisskopf, Jean-Philippe
• 署名单位: University of Fribourg; Hautes Etudes Commerciales (HEC) Paris
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab010
• 发表日期: 2021
• 页码: 5756
• 关键词: corporate-taxation; POLICY; BEHAVIOR; cost; LAW

摘要

We study the effect of dividend taxes on the payout and investment policies of publicly listed firms. We exploit a unique setting in Switzerland where, following the corporate tax reform of 2011, some but not all firms were suddenly able to pay tax-exempt dividends. We show that treated firms increase their dividend payout by around 30% after the tax cut. The effect on payout is less pronounced for firms prone to agency conflicts. We find a significant positive abnormal stock return after the announcement of the payment of a tax-exempt dividend. However, reducing dividend taxes does not boost investment.