Professor of Finance
Via Rontgen, 1
NBER Working Papers and Publications
|January 2018||The Information Content of Dividends: Safer Profits, Not Higher Profits|
with Roni Michaely, Michael Weber: w24237
Contrary to the central predictions of signaling models, changes in profits do not empirically follow changes in dividends, and firms with the least need to signal pay the bulk of dividends. We show both theoretically and empirically that dividends signal safer, rather than higher, future profits. Using the Campbell (1991) decomposition, we are able to estimate expected cash flows from data on stock returns. Consistent with our model's predictions, cash-flow volatility changes in the opposite direction from that of dividend changes, and larger changes in volatility come with larger announcement returns. We find similar results for share repurchases. Crucially, the data support the prediction---unique to our model---that the cost of the signal is foregone investment opportunities. We conclu...
|March 2010||Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes UK Focus Fund|
with Marco Becht, Julian Franks, Colin Mayer
in Corporate Governance, Michael Weisbach, editor
|November 2005||Spending Less Time with the Family: The Decline of Family Ownership in the United Kingdom |
with Julian Franks, Colin Mayer
in A History of Corporate Governance around the World: Family Business Groups to Professional Managers, Randall K. Morck, editor
|July 2004||Spending Less Time with the Family: The Decline of Family Ownership in the UK|
with Julian Franks, Colin Mayer: w10628
Family ownership was rapidly diluted in the twentieth century in Britain. The main cause was equity issued in the process of making acquisitions. In the first half of the century, it occurred in the absence of minority investor protection and relied on directors of target firms protecting the interests of shareholders. Families were able to retain control by occupying a disproportionate number of seats on the boards of firms. However, in the absence of large stakes, the rise of hostile takeovers and institutional shareholders made it increasingly difficult for families to maintain control without challenge. Potential targets attempted to protect themselves through dual class shares and strategic share blocks but these were dismantled in response to opposition by institutional shareholders ...
Published: Julian Franks & Colin Mayer & Stefano Rossi, 2005. "Spending Less Time with the Family: The Decline of Family Ownership in the United Kingdom," NBER Chapters, in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 581-612 National Bureau of Economic Research, Inc.