Session | ||
Session 4.08: Modelling Japanese firms’ dividend payout policies using new data
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Presentations | ||
Modelling Japanese firms’ dividend payout policies using new data 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. |