Dividends, share repurchases, and the substitution hypothesis

• 成果类型: Article
• 署名作者: Grullon, G; Michaely, R
• 署名单位: Rice University; Cornell University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00474
• 发表日期: 2002
• 页码: 1649-1684
• 关键词: policy; INFORMATION; INITIATIONS; decisions; earnings; taxes

摘要

We show that repurchases have not only became an important form of payout for U.S. corporations, but also that firms finance their share repurchases with funds that otherwise would have been used to increase dividends. We find that young firms have a higher propensity to pay cash through repurchases than they did in the past and that repurchases have become the preferred form of initiating a cash payout. Although large, established firms have generally not cut their dividends, they also show a higher propensity to pay out cash through repurchases. These findings indicate that firms have gradually substituted repurchases for dividends. Our results also suggest that before 1983, regulatory constraints inhibited firms from aggressively repurchasing shares.