Quotation Bremberger, Francisca, Cambini, Carlo, Gugler, Klaus, Rondi, Laura. 2016. Dividend Policy in Regulated Network Industries: Evidence from the EU. Economic Inquiry 54 (1), 408-432.




We study the dividend policy of firms in regulated network industries, focusing on the impact of different regulatory regimes and government control. We link payout and smoothing decisions to different regulatory mechanisms (cost-based vs. incentive regulation) and state versus private ownership. We test our predictions on a panel of listed European electric utilities, accounting for potential endogeneity of the choice of regulatory and ownership patterns. We find that incentive-regulated firms smooth their dividends less than cost-based regulated firms and that they report higher target payout ratios. Consistent with the interest group theory of regulation, we find that incentive regulation schemes are less likely when the state is still an important shareholder in the sector. Additionally, our results show that government control undermines the efficiency-enhancing effects of incentive regulation on dividend policy, for example, lower smoothing is only due to private firms.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Economic Inquiry
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, VW-C, WH-B
Language English
Title Dividend Policy in Regulated Network Industries: Evidence from the EU
Volume 54
Number 1
Year 2016
Page from 408
Page to 432
Reviewed? Y
URL http://onlinelibrary.wiley.com/doi/10.1111/ecin.12238/abstract
DOI http://dx.doi.org/10.1111/ecin.12238


Bremberger, Francisca (Details)
Gugler, Klaus (Details)
Cambini, Carlo (Politecnico di Torino , Italy)
Rondi, Laura (Politecnico di Torino , Italy)
Institute for Corporate Governance IN (Details)
Research Institute for Regulatory Economics FI (Details)
Department of Economics (Gugler) (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5372 Regulatory economics (Details)
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