Do Asymmetric Information and Ownership Structure Matter for Dividend Payout Decisions? Evidence from European Banks

Abstract : We empirically examine whether banks' dividend decisions are influenced by their degree of opacity and ownership structure. We find that banks with concentrated or dispersed ownership structure pay lower dividends when they have high degrees of opacity. These results would be consistent with the entrenchment behavior hypothesis, with insiders (managers or majority shareholders) paying lower dividends to extract higher levels of private benefits when banks' opacity is high. Higher levels of shareholder protection and stronger supervisory regimes help to constrain entrenchment behavior of majority shareholders. Our findings have critical policy implications for the Basel 3 implementation of restrictions on dividend payouts.
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https://hal-unilim.archives-ouvertes.fr/hal-01186722
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Soumis le : mardi 25 août 2015 - 15:26:34
Dernière modification le : mercredi 28 février 2018 - 17:06:02
Document(s) archivé(s) le : jeudi 26 novembre 2015 - 14:02:55

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Laetitia Lepetit, Céline Meslier-Crouzille, Leo Indra Wardhana. Do Asymmetric Information and Ownership Structure Matter for Dividend Payout Decisions? Evidence from European Banks. 2015. ⟨hal-01186722⟩

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