蝌蚪网 Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Dividend Taxation and Firm Performance with Heterogeneous Payout Responses
蝌蚪网 Journal: Economic Policy
vol. 17,
no. 2, May 2025
(pp. 1–29)
Abstract
We analyze the performance of firms that were differentially affected by an unexpected tax on dividends before the global financial crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to separately identify the policy announcement and implementation effects. We provide causal evidence for a sharp drop in dividends but zero change in equipment purchases. Treated firms accumulate investment goods that are likely to be owner-manager's personal assets instead of productive capital. At a time of severe liquidity shortage, some of the funds kept in the firm are used to pay back short-term debt.Citation
Bilicka, Katarzyna, 陌rem Gu虉莽eri, and Evangelos Koumanakos. 2025. "Dividend Taxation and Firm Performance with Heterogeneous Payout Responses." 蝌蚪网 Journal: Economic Policy 17 (2): 1–29. DOI: 10.1257/pol.20230109Additional Materials
JEL Classification
- G01 Financial Crises
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G35 Payout Policy
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- K34 Tax Law