Abstract
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | Finance |
| Number of pages | 45 |
| Volume | 2003-28 |
| Publication status | Published - 2003 |
Publication series
| Name | CentER Discussion Paper |
|---|---|
| Volume | 2003-28 |
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Keywords
- dividends
- investment
- surveys
- transaction costs
- agency theory
Cite this
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Why Individual Investors want Dividends. / Dong, M.; Robinson, C.; Veld, C.H.
Tilburg : Finance, 2003. (CentER Discussion Paper; Vol. 2003-28).Research output: Working paper › Discussion paper › Other research output
TY - UNPB
T1 - Why Individual Investors want Dividends
AU - Dong, M.
AU - Robinson, C.
AU - Veld, C.H.
N1 - Pagination: 45
PY - 2003
Y1 - 2003
N2 - The question of why individual investors want dividends is investigated by submitting a questionnaire to a Dutch consumer panel.The respondents indicate that they want dividends, partly because the transaction costs of cashing in dividends are lower than the transaction costs involved in selling shares.The results are inconsistent with the uncertainty resolution theory of Gordon (1961, 1962) and the agency theories of Jensen (1986) and Easterbrook (1984).In contrast, a very strong confirmation is found for the signaling theories of Bhattacharya (1979) and Miller and Rock (1985).The behavioral finance theory of Shefrin and Statman (1984) is not confirmed for cash dividends but is confirmed for stock dividends.Finally, our results indicate that individual investors do not tend to consume a large part of their dividends.This raises some doubt on the effectiveness of the elimination of dividend taxes in order to stimulate the economy.
AB - The question of why individual investors want dividends is investigated by submitting a questionnaire to a Dutch consumer panel.The respondents indicate that they want dividends, partly because the transaction costs of cashing in dividends are lower than the transaction costs involved in selling shares.The results are inconsistent with the uncertainty resolution theory of Gordon (1961, 1962) and the agency theories of Jensen (1986) and Easterbrook (1984).In contrast, a very strong confirmation is found for the signaling theories of Bhattacharya (1979) and Miller and Rock (1985).The behavioral finance theory of Shefrin and Statman (1984) is not confirmed for cash dividends but is confirmed for stock dividends.Finally, our results indicate that individual investors do not tend to consume a large part of their dividends.This raises some doubt on the effectiveness of the elimination of dividend taxes in order to stimulate the economy.
KW - dividends
KW - investment
KW - surveys
KW - transaction costs
KW - agency theory
M3 - Discussion paper
VL - 2003-28
T3 - CentER Discussion Paper
BT - Why Individual Investors want Dividends
PB - Finance
CY - Tilburg
ER -