Munich Personal RePEc Archive

Do Senior Citizens Prefer Dividends? Local Clienteles vs. Firm Characteristics

Krieger, Kevin and Lee, Bong-Soo and Mauck, Nathan (2012): Do Senior Citizens Prefer Dividends? Local Clienteles vs. Firm Characteristics.

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We examine the payout policy of U.S. firms over the period 1980-2008. Prior research indicates that firm characteristics, managerial preferences, and investor clienteles are all important factors in setting payout policy. Counter to the oft-reported positive relation between senior citizens and the use of dividends, our results indicate that senior citizens are either indifferent between dividends and repurchases or demand dividends and have no influence over firm policy. The evolution of firm characteristics, including the average firm size, age, and volatility of earnings over time best explains payout policy. Further, manager preference for flexibility drives the payout decision. JEL

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