The Effect of Institutional Ownership on Payout Policy: Evidence from Index Thresholds

• 成果类型: Article
• 署名作者: Crane, Alan D.; Michenaud, Sebastien; Weston, James P.
• 署名单位: Rice University; DePaul University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw012
• 发表日期: 2016
• 页码: 1377
• 关键词: Regression discontinuity; corporate governance; Dividend policy; SHAREHOLDER ACTIVISM; ANALYST COVERAGE; AGENCY COSTS; Mutual funds; INFORMATION; earnings; performance

摘要

We show that higher institutional ownership causes firms to pay more dividends. Our identification relies on a discontinuity in ownership around Russell index thresholds. Our estimates indicate that a one-percentage-point increase in institutional ownership causes a $7 million (8%) increase in dividends. We also find differences in shareholder proposals and voting patterns that suggest that even nonactivist institutions play an important role in monitoring firm behavior. The effect of institutional ownership on dividends is stronger for firms with higher expected agency costs.