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Publications

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  • All HBS Web  (137)
    • News  (10)
    • Research  (114)
  • Faculty Publications  (60)

Show Results For

  • All HBS Web  (137)
    • News  (10)
    • Research  (114)
  • Faculty Publications  (60)
Page 1 of 137 Results →
  • 2016
  • Working Paper

Financing Payouts

By: Joan Farre-Mensa, Roni Michaely and Martin Schmalz
We study the extent to which firms rely on the capital markets to fund their payouts. We find that 42% of firms that pay out capital also initiate debt or equity issues in the same year, resulting in 32% of aggregate payouts being externally financed. Most firms with... View Details
Keywords: Payout Policy; Financing Decisions; Debt Issues; Equity Issues; Capital Structure; Decision Making; Financing and Loans; Corporate Finance
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Farre-Mensa, Joan, Roni Michaely, and Martin Schmalz. "Financing Payouts." Harvard Business School Working Paper, No. 15-049, December 2014. (Revised December 2016.)
  • 28 Apr 2014
  • Working Paper Summaries

Payout Policy

Keywords: by Joan Farre-Mensa, Roni Michaely & Martin C. Schmalz
  • 2014
  • Chapter

Payout Policy

By: Joan Farre-Mensa, Roni Michaely and Martin Schmalz
We survey the literature on payout policy, with a particular emphasis on developments in the last two decades. Of the traditional motives of why firms pay out (agency, signaling, and taxes), the cross-sectional empirical evidence is most persuasive in favor of agency... View Details
Keywords: Finance; Investment; Financial Services Industry
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Farre-Mensa, Joan, Roni Michaely, and Martin Schmalz. "Payout Policy." In Annual Review of Financial Economics, Volume 6, edited by Andrew W. Lo and Robert C. Merton. Palo Alto, CA: Annual Reviews, 2014.
  • April 2011
  • Article

Institutional Tax Clienteles and Payout Policy

By: Mihir Desai and Li Jin
This paper employs heterogeneity in institutional shareholder tax characteristics to identify the relation between firm payout policy and tax incentives. Analysis of a panel of firms matched with the tax characteristics of the clients of their institutional... View Details
Keywords: Institutional Investors; Clienteles; Payout Policy; Private Equity; Investment; Taxation; Ownership Stake; Business and Shareholder Relations
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Desai, Mihir, and Li Jin. "Institutional Tax Clienteles and Payout Policy." Journal of Financial Economics 100, no. 1 (April 2011): 68–84.
  • Research Summary

Financing Payouts

Despite the obvious interest in payout policy, no paper to date has systematically analyzed how payouts are funded, perhaps because the answer might have appeared just too obvious: payouts are funded with free cash flow — at least over long enough time periods.... View Details
  • 12 May 2015
  • Working Paper Summaries

Financing Payouts

Keywords: by Joan Farre-Mensa, Roni Michaely & Martin C. Schmalz
  • 2012
  • Working Paper

Payout Taxes and the Allocation of Investment

When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes will favor... View Details
Keywords: Business Earnings; Equity; Financing and Loans; Investment; Taxation; Business and Shareholder Relations; Motivation and Incentives
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Becker, Bo, Marcus Jacob, and Martin Jacob. "Payout Taxes and the Allocation of Investment." Harvard Business School Working Paper, No. 11-040, October 2010. (Revised November 2010, March 2011, September 2011, April 2012.)
  • January 2013
  • Article

Payout Taxes and the Allocation of Investment

When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes will favor... View Details
Keywords: Taxation; Investment; Equity; Growth and Development Strategy; Resource Allocation
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Becker, Bo, Marcus Jacob, and Martin Jacob. "Payout Taxes and the Allocation of Investment." Journal of Financial Economics 107, no. 1 (January 2013): 1–24.

    Payout Taxes and the Allocation of Investment

    When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes... View Details

    • 18 Nov 2010
    • Working Paper Summaries

    Payout Taxes and the Allocation of Investment

    Keywords: by Bo Becker, Marcus Jacob & Martin Jacob
    • 11 Jan 2018
    • News

    Tax payouts deliver a wave of hope and hype

    • June 2021
    • Article

    Short-Termism, Shareholder Payouts, and Investment in the EU

    By: Jesse M. Fried and Charles C.Y. Wang
    Investor-driven "short-termism" is said to harm EU public firms' ability to invest for the long term, prompting calls for the EU to better insulate managers from shareholder pressure. But the evidence offered—rising levels of repurchases and dividends—is incomplete and... View Details
    Keywords: Short-termism; EU; Payout Policy; Innovation; Investment; Corporate Governance; Investment Return; Acquisition; European Union
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    Fried, Jesse M., and Charles C.Y. Wang. "Short-Termism, Shareholder Payouts, and Investment in the EU." European Financial Management 27, no. 3 (June 2021): 389–413.
    • May 2022
    • Article

    Investment as the Opportunity Cost of Dividend Signaling

    By: Zach Kaplan and Gerardo Pérez Cavazos
    We provide evidence that firms with weak investment opportunities (those whose current earnings justify a greater valuation than firms with strong investment opportunities) signal their permanent earnings level through their dividends. In the cross-section, we show... View Details
    Keywords: Dividends; Earnings; Investment Opportunities; Payout Policy; Signaling; Capital Structure; Business Earnings; Investment; Opportunities
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    Kaplan, Zach, and Gerardo Pérez Cavazos. "Investment as the Opportunity Cost of Dividend Signaling." Accounting Review 97, no. 3 (May 2022): 279–308.
    • August 2004
    • Article

    Appearing and Disappearing Dividends: The Link to Catering Incentives

    By: Malcolm Baker and Jeffrey Wurgler
    We document a close link between fluctuations in the propensity to pay dividends and catering incentives. First, we use the methodology of Fama and French (J. Finan. Econ. (2001)) to identify a total of four distinct trends in the propensity to pay dividends... View Details
    Keywords: Dividends; Payout Policy; Catering; Dividend Premium; Investor Sentiment; Investment Return; Motivation and Incentives; Trends; Stocks; Financial Services Industry
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    Baker, Malcolm, and Jeffrey Wurgler. "Appearing and Disappearing Dividends: The Link to Catering Incentives." Journal of Financial Economics 73, no. 2 (August 2004): 271–288.
    • Article

    Short-Termism and Capital Flows

    By: Jesse M. Fried and Charles C.Y. Wang
    During 2007–2016, S&P 500 firms distributed to shareholders $7 trillion via buybacks and dividends, over 96% of their aggregate net income, prompting claims that "short-termism" is impairing firms' ability to invest and innovate. We show that, when taking into account... View Details
    Keywords: Short-termism; Quarterly Capitalism; Share Buybacks; Open Market Repurchases; Dividends; Equity Issuances; Seasoned Equity Offerings; Equity Compensastion; Acquisitions; Payout Policy; Capital Flows; Capital Distribution; Working Capital; Business and Shareholder Relations; Acquisition
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    Fried, Jesse M., and Charles C.Y. Wang. "Short-Termism and Capital Flows." Review of Corporate Finance Studies 8, no. 1 (March 2019): 207–233.
    • November 2017
    • Teaching Note

    Generating Higher Value at IBM (A) and (B)

    By: Benjamin C. Esty and E. Scott Mayfield
    Teaching Note for HBS Nos. 215-058 and 215-059. View Details
    Keywords: Dividends; Share Repurchases; Earnings Guidance; Financial Statement Analysis; Financial Ratios; Payout Policy; Earnings Per Share (EPS); Earnings Management; Change Management; Leadership; Transformation; Financial Strategy
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    Esty, Benjamin C., and E. Scott Mayfield. "Generating Higher Value at IBM (A) and (B)." Harvard Business School Teaching Note 218-037, November 2017.
    • May 2015 (Revised December 2016)
    • Supplement

    Generating Higher Value at IBM (B)

    By: Benjamin C. Esty and E. Scott Mayfield
    Keywords: Dividends; Share Repurchases; Earnings Guidance; Financial Statement Analysis; Financial Ratios; Payout Policy; Earnings Per Share (EPS); Value Creation; Financial Statements; Corporate Finance; Computer Industry
    Citation
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    Esty, Benjamin C., and E. Scott Mayfield. "Generating Higher Value at IBM (B)." Harvard Business School Supplement 215-059, May 2015. (Revised December 2016.)
    • June 2015 (Revised September 2017)
    • Supplement

    Generating Higher Value at IBM

    By: Benjamin C. Esty and Scott Mayfield
    This case analyzes IBM's financial performance and its capital allocation decisions over a 10-year period from 2004-2013, during which IBM returned more than $140B to shareholders through a combination of dividends and share repurchases. During this time, CEO Sam... View Details
    Keywords: Dividends; Share Repurchases; Earnings Guidance; Financial Statement Analysis; Financial Ratios; Payout Policy; Earnings Per Share (EPS); Earnings Management; Change Management; Leadership; Transformation; Financial Strategy
    Citation
    Purchase
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    Esty, Benjamin C., and Scott Mayfield. "Generating Higher Value at IBM." Harvard Business School Spreadsheet Supplement 215-710, June 2015. (Revised September 2017.)
    • 2021
    • Article

    The Sustainable Corporate Governance Initiative in Europe

    By: Mark Roe, Holger Spamann, Jesse M. Fried and Charles C.Y. Wang
    In July 2020, the European Commission published the “Study on directors’ duties and sustainable corporate governance” by EY. The Report purports to find evidence of debilitating short-termism in EU corporate governance and recommends many changes to support sustainable... View Details
    Keywords: Short-termism; Hedge Funds; Shareholder Activism; Securities Regulation; Agency Costs; Political Economy; Payouts; Repurchases; Corporate Governance; Investment Funds; Investment Activism; Research and Development; Investment; European Union
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    Roe, Mark, Holger Spamann, Jesse M. Fried, and Charles C.Y. Wang. "The Sustainable Corporate Governance Initiative in Europe." Yale Journal on Regulation Bulletin 38 (2021): 133–153.
    • June 2015
    • Supplement

    Generating Higher Value at IBM (A): EPS Forecasting Model

    By: Benjamin C. Esty and Scott Mayfield
    This case analyzes IBM's financial performance and its capital allocation decisions over a 10-year period from 2004-2013, during which IBM returned more than $140B to shareholders through a combination of dividends and share repurchases. During this time, CEO Sam... View Details
    Keywords: Dividends; Share Repurchases; Earnings Guidance; Financial Statement Analysis; Financial Ratios; Payout Policy; Earnings Per Share (EPS); Earnings Management; Change Management; Leadership; Transformation; Financial Strategy
    Citation
    Purchase
    Related
    Esty, Benjamin C., and Scott Mayfield. "Generating Higher Value at IBM (A): EPS Forecasting Model." Harvard Business School Spreadsheet Supplement 215-711, June 2015.
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