Catering to the Whole Spectrum of Dividends: Evidence from the Taiwan Stock Market

This study examines the presence of catering for various dividend policies in Taiwanese firms, including cash, stock and dual dividends. Different from prior results in the literature, we find that the catering phenomenon exists for these three types of dividend decisions. When one type of dividend...

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Bibliographic Details
Published in:Journal of emerging market finance 2018-12, Vol.17 (3_suppl), p.S433-S452
Main Authors: Teng, Chia-Chen, Liu, Victor W.
Format: Article
Language:English
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Summary:This study examines the presence of catering for various dividend policies in Taiwanese firms, including cash, stock and dual dividends. Different from prior results in the literature, we find that the catering phenomenon exists for these three types of dividend decisions. When one type of dividend premium (i.e., cash dividend) is high, managers are more likely to issue the same type of dividend and less likely to issue the other type of dividend (i.e., stock dividend). Catering persists even after controlling for the effects of a firm’s characteristics, risk and external policy, as well as macroeconomic situations. JEL Classification: G35, C23
ISSN:0972-6527
0973-0710
DOI:10.1177/0972652718798189