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Volume 19, Number 2 / June 2015 , Pages 77-147
Multinational Finance Journal, 2015, vol. 19, no. 2, pp. 77-107 |
Robert Joliet , IESEG School of Management Lille-Paris, France
Aline Muller , HEC Management School of the University of Liège, Belgium    Corresponding Author

This study uses Hines’ (1996) dividend process model to test the effect of domestic versus foreign profitability shocks on firms’ dividend payout policy. Investigating an international sample of 283 companies from Continental Europe, Australia, New Zealand, the U.S.A. and Canada, we find that increases in some foreign market earnings stimulate higher cash distributions than similar increases in domestic earnings. The disaggregation of foreign performance across country-specific markets reveals that managers are predominantly using dividends to signal foreign profit movements that have been generated in emerging markets and Asian Pacific developed markets – while they do not feel compelled to send signals related to positive earnings news originating from other mature developed markets (i.e. North America and Western Europe). The findings also confirm the popular view that due to their higher variance and lower persistence, positive foreign profitability shocks coming from emerging markets are more difficult to integrate into stable dividend policies.

Keywords : disclosure; dividend policy; multinational firm; disaggregation; emerging markets
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Multinational Finance Journal, 2015, vol. 19, no. 2, pp. 109-147 |
Eleftherios Angelopoulos , University of Patras, Greece    Corresponding Author
Antonios Georgopoulos , University of Patras, Greece

This study examines the performance of retail banking focusing on the link between shareholder value creation and operational value drivers. A unique panel data set is used, derived from the monthly Profit and Loss statements of a branch network of a very large commercial bank operating in the Greek oligopolistic financial system for the period 2006–2010. Taking into account the existence of important trade-offs between most factors of shareholder value, the value effects of the recent Greek crisis primarily characterized by the sovereign debt factor are systematically incorporated in the analysis. The results show that the crisis reverses the generally positive value effect of income diversification and reduces the value premium of lending spreads. Moreover, the crisis significantly intensifies the value premium of efficient cost management, whilst simultaneously accelerating the value destruction causing by credit risk. The findings have important managerial implications for bank managers and policymakers.

Keywords : retail banking performance; shareholder value drivers; residual income approach; greek crisis
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