Import competition and financial flexibility: Evidence from corporate payout policy

Laurence Booth; Mengying Wang; Jun Zhou

doi:10.1016/j.iref.2019.05.001

Import competition and financial flexibility: Evidence from corporate payout policy

Laurence Booth, Mengying Wang, Jun Zhou

Rowe School of Business

Management

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

Abstract

This study examines the impact of import competition on a firm's preference for financial flexibility by examining corporate payout policy. We confirm existing results that firms with greater exposure to import competition are less likely to pay regular dividends and pay less. We extend these results by showing that firms subject to greater import competition are less likely to initiate or increase regular cash dividends, and are more likely to decrease or omit them. Further, we are the first to show that for firms that have a positive cash payout there is a clear preference for the flexible distribution channel when faced with more intense import competition.

Original language	English
Pages (from-to)	382-396
Number of pages	15
Journal	International Review of Economics and Finance
Volume	63
DOIs	https://doi.org/10.1016/j.iref.2019.05.001
Publication status	Published - Sept 2019

Bibliographical note

Funding Information:
The authors are grateful for comments received from seminar participants at the Canadian Economics Association 2015 Annual Conference (Toronto), Financial Management Association International 2017 Annual Meeting (Boston), and 2019 Spring Conference of the Multinational Finance Society (Crete). Jun Zhou gratefully recognize the financial support of the Rowe Research Grant and the Research Development Fund provided by Dalhousie University .

Funding Information:
The authors are grateful for comments received from seminar participants at the Canadian Economics Association 2015 Annual Conference (Toronto), Financial Management Association International 2017 Annual Meeting (Boston), and 2019 Spring Conference of the Multinational Finance Society (Crete). Jun Zhou gratefully recognize the financial support of the Rowe Research Grant and the Research Development Fund provided by Dalhousie University.

Publisher Copyright:
© 2019 Elsevier Inc.

ASJC Scopus Subject Areas

Finance
Economics and Econometrics

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Cite this

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title = "Import competition and financial flexibility: Evidence from corporate payout policy",

abstract = "This study examines the impact of import competition on a firm's preference for financial flexibility by examining corporate payout policy. We confirm existing results that firms with greater exposure to import competition are less likely to pay regular dividends and pay less. We extend these results by showing that firms subject to greater import competition are less likely to initiate or increase regular cash dividends, and are more likely to decrease or omit them. Further, we are the first to show that for firms that have a positive cash payout there is a clear preference for the flexible distribution channel when faced with more intense import competition.",

author = "Laurence Booth and Mengying Wang and Jun Zhou",

note = "Funding Information: The authors are grateful for comments received from seminar participants at the Canadian Economics Association 2015 Annual Conference (Toronto), Financial Management Association International 2017 Annual Meeting (Boston), and 2019 Spring Conference of the Multinational Finance Society (Crete). Jun Zhou gratefully recognize the financial support of the Rowe Research Grant and the Research Development Fund provided by Dalhousie University . Funding Information: The authors are grateful for comments received from seminar participants at the Canadian Economics Association 2015 Annual Conference (Toronto), Financial Management Association International 2017 Annual Meeting (Boston), and 2019 Spring Conference of the Multinational Finance Society (Crete). Jun Zhou gratefully recognize the financial support of the Rowe Research Grant and the Research Development Fund provided by Dalhousie University. Publisher Copyright: {\textcopyright} 2019 Elsevier Inc.",

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AU - Zhou, Jun

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AB - This study examines the impact of import competition on a firm's preference for financial flexibility by examining corporate payout policy. We confirm existing results that firms with greater exposure to import competition are less likely to pay regular dividends and pay less. We extend these results by showing that firms subject to greater import competition are less likely to initiate or increase regular cash dividends, and are more likely to decrease or omit them. Further, we are the first to show that for firms that have a positive cash payout there is a clear preference for the flexible distribution channel when faced with more intense import competition.

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Import competition and financial flexibility: Evidence from corporate payout policy

Abstract

Bibliographical note

ASJC Scopus Subject Areas

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