Dividend Policies in an Unregulated Market

The London Stock Exchange 1895-1905

F. Braggion, L. Moore

Research output: Working paperDiscussion paperOther research output

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Abstract

We examine the e¤ects of dividend policies on 469 British firms between 1895 and 1905. These firms operated in an environment of very low taxation and an absence of institutional constraints. We find strong support for asymmetric information/signaling theories of dividend policy, and little support for agency models. Our results suggest that dividends can signal information from managers to shareholders, even if dividend payments incur only very low taxes. However, taxes appear to be necessary to allow dividend policies to resolve agency problems between managers and investors.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages41
Volume2008-83
Publication statusPublished - 2008

Publication series

NameCentER Discussion Paper
Volume2008-83

Fingerprint

Dividend policy
London Stock Exchange
Tax
Managers
Dividends
Asymmetric information
Payment
Investors
Agency problems
Agency model
Taxation
Institutional constraints
Shareholders
Signaling theory

Keywords

  • Dividend Policy
  • London Stock Exchange

Cite this

Braggion, F., & Moore, L. (2008). Dividend Policies in an Unregulated Market: The London Stock Exchange 1895-1905. (CentER Discussion Paper; Vol. 2008-83). Tilburg: Finance.
Braggion, F. ; Moore, L. / Dividend Policies in an Unregulated Market : The London Stock Exchange 1895-1905. Tilburg : Finance, 2008. (CentER Discussion Paper).
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Braggion, F & Moore, L 2008 'Dividend Policies in an Unregulated Market: The London Stock Exchange 1895-1905' CentER Discussion Paper, vol. 2008-83, Finance, Tilburg.

Dividend Policies in an Unregulated Market : The London Stock Exchange 1895-1905. / Braggion, F.; Moore, L.

Tilburg : Finance, 2008. (CentER Discussion Paper; Vol. 2008-83).

Research output: Working paperDiscussion paperOther research output

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AB - We examine the e¤ects of dividend policies on 469 British firms between 1895 and 1905. These firms operated in an environment of very low taxation and an absence of institutional constraints. We find strong support for asymmetric information/signaling theories of dividend policy, and little support for agency models. Our results suggest that dividends can signal information from managers to shareholders, even if dividend payments incur only very low taxes. However, taxes appear to be necessary to allow dividend policies to resolve agency problems between managers and investors.

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Braggion F, Moore L. Dividend Policies in an Unregulated Market: The London Stock Exchange 1895-1905. Tilburg: Finance. 2008. (CentER Discussion Paper).