Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308356 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11460
Publisher: 
CESifo GmbH, Munich
Abstract: 
This paper presents a novel study on the significance of corporate payout policy in shaping firms' financial decision-making and, in turn, the macroeconomy. To this end, we add to the literature by allowing households and firms to choose share buybacks optimally. We then explore the implications of various shocks commonly facing them, such as dividend income, investment, and tax shocks. The latter include corporate income, capital gains, and dividend income taxes. We find that the model predictions cohere well with the data when applying the non-policy shocks. We also find that tax reform's aggregate and welfare effects are overstated when share buybacks are not optimally chosen as assumed in the relevant literature.
Subjects: 
dividends
share repurchases
tax reforms
payout flexibility
JEL: 
C68
E62
G30
G35
H25
H30
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.