Active catering to dividend clienteles: Evidence from takeovers

A-Tier
Journal: Journal of Financial Economics
Year: 2020
Volume: 137
Issue: 3
Pages: 815-836

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We use merger-induced changes to shareholder structure to test for active catering to dividend clienteles. Following mergers, acquirers adjust their dividend payout toward that of the target, but only when they inherit target shareholders through stock swaps. This adjustment is stronger when legacy shareholders are more influential and reveal a greater preference for dividends through portfolio holdings and trading behavior. Country-level differences in dividend taxes, governance quality, and population age further shape the extent of adjustment in ways consistent with dividend preferences. Pre-closing, differences in dividend payout discourage the use of stock as a payment method.

Technical Details

RePEc Handle
repec:eee:jfinec:v:137:y:2020:i:3:p:815-836
Journal Field
Finance
Author Count
3
Added to Database
2026-01-25