Browsing by Author "Dias, Pedro Miguel da Rocha Baptista"
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- Untangling buybacks vs. dividends in Europe and in the U.S.Publication . Dias, Pedro Miguel da Rocha Baptista; David, ThomasThe literature shows an increase in activity in share repurchases in the latest years in Europe and in the U.S., alongside a reappearance of dividends. This research reveals a surge in repurchases of 107% in Europe and of 55% in the U.S. for the 2001-18 period, whereas the fraction of dividends slightly increased 7 p.p. in Europe, to 91%, and 6 p.p. in the U.S., to 79%, in 2018. Although these are two forms of disbursing cash to shareholders, dividends tend to be more resilient and carry signaling power, whilst repurchases are more sporadic and their policy can vary without compromise. The focus is on ascertaining the significant drivers for repurchases and dividend payments. Hence, the main characteristics analysed are the Size, Cash Holdings, Investment Opportunities, Leverage Ratio, Profitability and Region. The majority proved to be significant across the models measuring the propensity to pay dividends and repurchase shares, and the natural logarithm of the amount of dividends and repurchases, mostly confirming the expected relationships.