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Dividend Policies in an Unregulated Market : The London Stock Exchange 1895-1905

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  • Braggion, F.

    (Tilburg University, School of Economics and Management)

  • Moore, L.

Abstract

Miller and Modigliani (1961) show that in perfect and complete financial markets a firm's value is unaffected by its dividend policy. Much of the more recent research has demonstrated that dividend policy becomes important in the presence of taxation, asymmetric information, incomplete contracts, institutional constraints, and transaction costs. By examining the effects of dividend policies on 475 British firms existing between 1895 and 1905, and consequently operating in an environment of very low taxation with an absence of institutional constraints, we find strong support for asymmetric information theories of dividend policy, and little support for agency models. The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.
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Suggested Citation

  • Braggion, F. & Moore, L., 2008. "Dividend Policies in an Unregulated Market : The London Stock Exchange 1895-1905," Other publications TiSEM 3a430536-9f4a-49ae-b472-c, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:3a430536-9f4a-49ae-b472-c0d134404169
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    More about this item

    JEL classification:

    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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