Pension Funding Constraints and Corporate Expenditures

  title={Pension Funding Constraints and Corporate Expenditures},
  author={Weixi Liu and Ian Tonks},
This paper examines the effect of a company’s pension contributions on its dividend and investment policies. Using a sample of all FTSE350 UK listed firms with at least one defined benefit pension scheme from 2001 to 2004, we find a strong and negative relation between pension contributions and corporate dividend payments even after controlling for the correlation between funding status and unobserved investment opportunities. We find a weaker result using investment equations, where investment… CONTINUE READING


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