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Session 4.08: Modelling Japanese firms’ dividend payout policies using new data
Time:
Tuesday, 26/Aug/2025:
2:30pm - 3:00pm
Location:Tosca Conference hall
Meeting hall “Tosca”, which can accommodate up to 60 people
Presentations
Modelling Japanese firms’ dividend payout policies using new data
Prof. Clinton Watkins1,2
1Faculty of International Liberal Arts, Akita International University, Japan; 2Graduate School of Economics, Kobe University, Japan
Despite voluminous empirical research and numerous theoretical contributions, the ``dividend puzzle'' persists. The lack of data on firms ' widely hypothesized dividend payout targets is an impediment to understanding why firms pay dividends and how much to pay. Researchers have relied on limited survey data collected at a point in time, over a short period, or by using realized dividend payout ratios. This research builds a novel database of voluntary numerical medium-term forward-looking dividend payout target disclosures by Japanese firms in their Annual Securities Reports. Text analysis methods are employed to extract a panel of data on firms' targets. This data is unique as medium-term targets are not disclosed systematically elsewhere. I examine the characteristics of the target disclosures in the time series and cross-section, the financial characteristics of the firms that voluntarily disclose targets, and use the targets to examine dividend smoothing and the speed of dividend adjustment.
