Payout Policy and the Period between the Ex-Dividend Date and the Payment Date: An Analysis of Taiwan Market over 2009-11

Abstract

We study the payout policy of Taiwanese firms over 2009-2011 and collect payout events of three forms: distributing cash dividends, conducting share repurchases and reducing capital. Due to the dominant role of dividends, we focus on four issues pertaining to dividends. The first issue is on the increasing propensity of paying dividends, the second one is on the concentration of dividends among large and profitable firms, the third one is on how the period between the ex-dividend date and the payment date distributes, and the forth one is to claim that the reasonable period should be less than 16 days. Furthermore, we found that the OTC-listed payers contribute a fraction of only 7% of that contributed by TSE-listed firms, and the latter reveal a more stable and consistent payout policy. As a firm, especially for a TSE-listed firm, becomes mature its period tends to become shorter and more stable. We verify the association between the maturity of a firm and its dividend policy.

Keywords: payout policy, dividend policy, payment date, concentration of dividends

JEL Classification: G32, G35