Payouts smoothing and income growth

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dc.citation.volumeLatest Articles
dc.contributor.authorBalli F
dc.contributor.authorNguyen H
dc.contributor.authorChowdhury MIH
dc.contributor.authorBalli HO
dc.date.accessioned2025-09-15T03:17:41Z
dc.date.available2025-09-15T03:17:41Z
dc.date.issued2025-09-01
dc.description.abstractWe quantify the extent and drivers of payout smoothing by employing 34,966 US firms’ data from 1975 to 2022. We report that payout growth is almost insensitive to year-by-year net income growth, in line with preceding literature suggesting payout smoothing. Novel to the literature, we incorporate the dynamics of payout smoothing, permanent, and aggregate net income growth into the depiction. Though payout growth is mostly immune to annual income growth shocks, it is significantly affected by net income growth of 5- or 10-year periods. Firms also consider the aggregate-sectoral and/or country-level-income growth in payout decisions. Since both permanent and aggregate income growths take over the role of year-by-year income growth, we further investigate if firms’ financial positions impact the magnitude of the smoothing. Annual payout growth depends more on permanent income growth for firms with higher profits and lower leverage positions. Notably, more financially vulnerable firms with higher leverage adjust payouts more in line with aggregate economic conditions.
dc.description.confidentialfalse
dc.format.pagination1-14
dc.identifier.citationBalli F, Nguyen H, Chowdhury MIH, Balli HO. (2025). Payouts smoothing and income growth. Applied Economics. Latest Articles. (pp. 1-14).
dc.identifier.doi10.1080/00036846.2025.2551287
dc.identifier.eissn1466-4283
dc.identifier.elements-typejournal-article
dc.identifier.issn0003-6846
dc.identifier.urihttps://mro.massey.ac.nz/handle/10179/73556
dc.languageEnglish
dc.publisherTaylor and Francis Group
dc.publisher.urihttps://www.tandfonline.com/doi/full/10.1080/00036846.2025.2551287
dc.relation.isPartOfApplied Economics
dc.rights(c) 2025 The Author/s
dc.rightsCC BY-NC-ND 4.0
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subjectPayout smoothing
dc.subjectincome growth
dc.subjectrisk-sharing
dc.subjectdividend polices
dc.subjectfinancial ratios
dc.titlePayouts smoothing and income growth
dc.typeJournal article
pubs.elements-id503174
pubs.organisational-groupOther
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