Research

The More, the Merrier: An International Analysis of the Frequency of Dividend Payment

The joint contributions of prospect theory and mental accounting imply that investors receive a higher utility when a given level of dividends is paid more frequently, suggesting that dividends should be paid as often as possible. Consequently, we examine the frequency with which dividends are paid around the world and what factors influence the choice of frequency. We find that dividend payment frequency differs internationally. From our multivariate analysis, we determine that non-behavioral factors such as the legal regime as well as the level and standard deviation of operating income exert significant influences on the payment frequency of dividends. Further, we document a positive relationship between payment frequency and the market-to-book ratio which we interpret as evidence that payment frequency has implications for firm value.

Publication Information
Article Title: The More, the Merrier: An International Analysis of the Frequency of Dividend Payment
Journal: Journal of Business Finance & Accounting (May, 2007)
Author(s): Ferris, Stephen P.;  Noronha, Gregory;  Unlu, Emre
Researcher Information
    
Unlu, Emre
Unlu, Emre
Executive Director of Executive Education
Expertise:
  • Corporate Finance
Finance
CoB 201 H
P.O. Box 880490
University of Nebraska-Lincoln
Lincoln, NE 68588-0490, USA
Phone: (402) 472-2353
emre@unl.edu