Dividend decisions in the property and liability insurance industry: mutual versus stock companies

Dividend decisions in the property and liability insurance industry: mutual versus stock companies This article examines the effect of organizational forms on corporate dividend decisions by exploring the differences in dividend payout ratios between mutual and stock property–liability (P–L) insurers in the US. Our large sample evidence suggests: (1) mutual insurers tend to have a lower dividend payout ratio than stock insurers and the observed difference is about 4% points, holding other factors constant; (2) mutual insurers tend to adjust dividend payout ratios toward their long-run target levels more slowly than stock firms. These results are consistent with the capital constraints and/or greater agency costs of equity in mutual insurers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Dividend decisions in the property and liability insurance industry: mutual versus stock companies

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Springer US
Copyright © 2008 by Springer Science+Business Media, LLC
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
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    Cummins, JD; Nini, GP
  • Risk management: coordinating corporate investment and financing policies
    Froot, KA; Scharfstein, DS; Stein, JC

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