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α: calibrated so average coauthorship-adjusted count equals average raw count
We investigate the impact of state level competition on bank dividends following the passage of the US Interstate Banking and Branching Efficiency Act (IBBEA). Using a sample of top-tier US bank holding companies, we find that in states where extensive deregulation leads to intensified competition, banks pay fewer dividends relative to counterparts operating in states where deregulation took place more slowly. These findings are stronger for banks with lower expected future earnings, suggesting that competition reduces the ability of lower performing banks to continue paying dividends. We also find that banks operating in states characterised by higher competition and less supervisory oversight pay higher dividends than counterparts operating in similarly competitive states with stricter supervision.