Dividends, trust, and firm value

• 成果类型: Article
• 署名作者: Kapons, Martin; Kelly, Peter; Stoumbos, Robert; Zambrana, Rafael
• 署名单位: University of Amsterdam; University of Notre Dame; ESSEC Business School
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-023-09795-4
• 发表日期: 2023
• 页码: 1354-1387
• 关键词: CAPITAL-MARKET EQUILIBRIUM; societal trust; corporate; FUTURE; INVESTMENT; investors; signal; POLICY; cost; fees

摘要

We find evidence that investors value dividends differently depending on their level of trust. Our tests indicate that investor demand for dividend-paying stocks increases as trust decreases, and that this relationship affects market values. We begin with survey evidence showing that people think accounting fraud is less likely among dividend payers and that people with low trust are more likely to hold dividend-paying stocks. We then empirically exploit accounting fraud discoveries within a mutual fund's portfolio as a shock to trust. In response to these shocks, we show that mutual funds tilt their portfolios toward dividend-paying stocks. This result is not explained by a shift in risk preferences, indicating that these institutional investors are seeking dividends in particular rather than stable firms that just happen to pay dividends. Finally, we provide evidence that dividend payers experience a premium in their market values relative to non-payers when their investor base becomes less trusting.