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Comparing dividend policies between Germany and the Netherlands: a test of the life-cycle theory

Trotz, K. (2013) Comparing dividend policies between Germany and the Netherlands: a test of the life-cycle theory.

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Abstract:This paper compares the dividend policies of German and Dutch firms on the basis of the life-cycle theory of dividends. Evidence for the life-cycle theory can be found for Germany whereas the Netherlands show no significant results for it but tend to pay out dividends in order to signal profitability. For Germany, the signaling theory as well as the clientele effect does not play a significant role in determining dividend policy. The life-cycle stages are determined by the earned/contributed capital mix which suggests that firms with high earned capital are mature and more likely to pay out (high) dividends. Germany and the Netherlands both pay out low dividends. The study in this paper indicates that dividend payout in both countries is also related to industry-specific characteristics.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration BSc (56834)
Link to this item:http://purl.utwente.nl/essays/63736
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