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Dividend taxes and payout policy: Evidence from Korea’s 2015-2017 dividend tax cut

Jeong Hwan Lee & Young Lee

Journal of Economic Research2019https://doi.org/10.17256/jer.2019.24.2.002article
ABDC B
Weight
0.41

Abstract

The Korean government temporarily lowered dividend tax rates for investors of firms that significantly increased dividend payments in 2015-2017. We examine how the dividend tax cut affects corporate payout policies. We found substantial dividend payment growth in the qualifying firms, mainly funded by operating cash flow; neither cash holding nor share repurchase is significantly reduced. The insider ownership is found to be an important factor in driving a continual enjoyment of the dividend tax cut. Yet, a large proportion of firms only temporarily enjoy the dividend tax cut in 2015, which argues against slow adjustments in dividend payout policy.

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https://doi.org/https://doi.org/10.17256/jer.2019.24.2.002

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@article{jeong2019,
  title        = {{Dividend taxes and payout policy: Evidence from Korea’s 2015-2017 dividend tax cut}},
  author       = {Jeong Hwan Lee & Young Lee},
  journal      = {Journal of Economic Research},
  year         = {2019},
  doi          = {https://doi.org/https://doi.org/10.17256/jer.2019.24.2.002},
}

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Dividend taxes and payout policy: Evidence from Korea’s 2015-2017 dividend tax cut

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.15 × 0.4 = 0.06
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.