The Impact of Product Market Competition on Firms ’ Payout Policy

@inproceedings{Grullon2014TheIO,
  title={The Impact of Product Market Competition on Firms ’ Payout Policy},
  author={Gustavo Grullon and Roni Michaely},
  year={2014}
}
This paper investigates the interaction between product market competition and managers’ decision to distribute cash to shareholders. Using a large sample of manufacturing firms, we find that firms in more competitive industries pay more dividends than firms in less competitive markets. Further, consistent with agency theory, we find that the effect of product market competition on corporate payouts became significantly stronger after an exogenous event that intensifies the agency conflict… CONTINUE READING