Determinants of the First Cash Payout Decision of Listed Firms: The Role of Industry Factors

摘要

This study examines the role of industry factors as determinants of the first cash dividend payout decision of firms listed during the period 1983-2002. We find that the likelihood of a firm initiating its first ever post-IPO cash dividends in a particular year is significantly positively related to the prior-year percentage of cash-dividend-paying firms in the industry. This result suggests that firms take their cues from their industry peers when they decide on the timing of their first ever cash payout. We also find that a firm’s cash dividend initiation decision is significantly negatively related to industry concentration, but is not significantly related to industry growth opportunities after we have controlled for market and firm-level variables that could affect the firm’s dividend initiation policy.