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Why do firms pay dividends? 180 years of evidence

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  • Leentje Moortgat
  • Jan Annaert
  • Marc Deloof

Abstract

We investigate the determinants of dividend payments in Belgium between 1838 and 2020. As the institutional environment changes drastically over time, we explore whether the determinants of dividend payments depend on the environment in which firms operate. Large firms, firms that are not informationally opaque, firms with a high share denomination and firms with liquid shares are more likely to pay. However, the importance of these characteristics changed over time. Surprisingly, firms seemingly do not use dividends for signaling. Our results indicate that the omnipresence of universal banks in pre-war Belgium might have lowered the need for a signal.

Suggested Citation

  • Leentje Moortgat & Jan Annaert & Marc Deloof, 2023. "Why do firms pay dividends? 180 years of evidence," European Review of Economic History, European Historical Economics Society, vol. 27(4), pages 533-559.
    • Handle: RePEc:oup:ereveh:v:27:y:2023:i:4:p:533-559.
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    File URL: http://hdl.handle.net/10.1093/ereh/head002
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