The global preference for dividends in declining markets

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Goldstein, Michael A.
Goyal, Abhinav
Lucey, Brian M.
Muckley, Cal B.
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Investors globally prefer dividend‐paying stocks over nondividend‐paying stocks more in declining than in advancing markets, even accounting for firm‐level growth opportunities, size and risk effects. Dividend‐paying stocks outperform nondividend‐paying stocks, from 0.63% (China) to 3.79% (Canada) more per month in declining than in advancing markets. In declining markets, dividend‐paying firms outperform by more than any underperformance in advancing markets. The results are robust across dividend taxation regimes, legal environments, emerging and developed markets, periods prior to and after the 2008 global financial crisis, the exclusion of the dividend declaration month and in respect to segmented or integrated international capital markets.
BRICS , Dividend policy , G-7 , Market movement
Goldstein, M. A., Goyal, A., Lucey, B. M. and Muckley, C. B. (2015) 'The Global Preference for Dividends in Declining Markets', Financial Review, 50(4), pp. 575-609.
© 2015 The Eastern Finance Association. This is the peer reviewed version of the following article: Goldstein, M.A., Goyal, A., Lucey, B.M. and Muckley, C.B. (2015), The Global Preference for Dividends in Declining Markets. Financial Review, 50: 575-609, which has been published in final form at This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving