Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5090825 | Journal of Banking & Finance | 2008 | 10 Pages |
Abstract
Using information collected from the Swedish tax authorities, we calculate insiders' actual effective tax rates on dividends. With this unique dataset, we find a significant negative cross-sectional relationship between insiders' effective tax rates and dividend payout. This result is consistent with a tax-induced clientele effect for dividends. We also look at the impact of large block trades on dividends. We find that when insiders with zero effective taxes sell blocks, subsequent dividend payments are significantly more likely to decrease. This provides evidence that large shareholders are adjusting dividends for their individual tax situations.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Martin Holmen, John D. Knopf, Stefan Peterson,