Dividend policies in practice: Is there an industry effect?

Abstract

This paper presents evidence concerning industry influences on the dividend decision after controlling for other firmspecific determinants known from prior research to affect payouts. Two sharply contrasting economic periods are examined: 1974 to 1980 and 1981 to 1987. Industry affiliation is found to possess significant explanatory power when modeling payout behavior at the individual firm level. The specific industries found to be significant are relatively few in number, however, and they do not exhibit persistence in their effect over time, for the most part. Consequently, only modest support is found for the industry-related dividend leadership effect posited by Lintner (1956).