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Dividends, Share Repurchases, and Tax Clienteles: Evidence from the 2003 Reductions in Shareholder Taxes / Jennifer Blouin, Jana Raedy, Douglas Shackelford.
- Format:
- Book
- Author/Creator:
- Blouin, Jennifer.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w16129.
- NBER working paper series no. w16129
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Dividends, Share Repurchases, and Tax Clienteles
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2010.
- Summary:
- This paper jointly evaluates firm-level changes in investor composition and shareholder distributions following a 2003 reduction in the dividend and capital gains tax rates for individuals. We find that directors and officers, but not other individual investors, rebalanced their portfolios to maximize after-tax returns in light of the new tax rules. We also find that firms adjusted their distribution policy (specifically, dividends versus share repurchases) in a manner consistent with the altered tax incentives for individual investors. To our knowledge, this is the first paper to employ simultaneous equations to estimate both investor and managerial responses to the 2003 rate reductions. We find that estimating a system of equations leads to different inferences.
- Notes:
- Print version record
- June 2010.
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