Investor Communication and Payout Policy : A Field Experiment

Xiaoqiao WANG; Jing XIE; Bohui ZHANG; Xiaofeng ZHAO

doi:10.1093/rof/rfaf044

Investor Communication and Payout Policy : A Field Experiment

Xiaoqiao WANG
, Jing XIE
, Bohui ZHANG^*
, Xiaofeng ZHAO

^*Corresponding author for this work

FACULTY OF BUSINESS

Research output: Journal Publications › Journal Article (refereed) › peer-review

Abstract

We conduct a field experiment to examine whether brief, unsolicited messages can influence corporate dividend policies. Messages highlighting investor concerns rooted in four dividend theories were sent to publicly listed firms. We find that messages framed around agency concerns significantly increase dividend payouts among past payers, particularly those with weaker governance. This effect is robust across alternative specifications and validated by a post-experiment survey. In contrast, messages based on bird-in-hand, signaling, or tax-clientele theories have no significant impact. Our findings suggest that dividend policy is more malleable than traditionally assumed and highlight the role of managerial perceptions in financial decision-making.

Original language	English
Pages (from-to)	1833-1870
Number of pages	38
Journal	Review of Finance
Volume	29
Issue number	6
Early online date	7 Oct 2025
DOIs	https://doi.org/10.1093/rof/rfaf044
Publication status	Published - 1 Nov 2025

Bibliographical note

Publisher Copyright:
© The Author(s) 2025. Published by Oxford University Press on behalf of the European Finance Association.

Funding

We thank one anonymous referee and David Solomon (the editor) for their valuable comments. We also appreciate helpful comments from Chunrong Ai, Franklin Allen, Thomas Chemmanur, Allaudeen Hameed, Jarrad Hardford, Jiekun Huang, Liang Jiang, Chen Lin, Xiumin Martin, Bin Miao, Zheng Michael Song, Wei Xiong, Bernard Yeung, Tianyu Zhang, Xiaoyan Zhang, and the conference and seminar participants at the 2023 ABFER webinar, the 2023 ESG Shanghai symposium, 2023 Tri-University Annual Conference, the 2022 Asian Finance Association Annual Conference, 2022 FMA Asia Pacific Conference, the 9th International Conference of the Journal of International Accounting Research, The Chinese University of Hong Kong-Shenzhen SME Research Fair, Fudan University, the Hong Kong Polytechnic University. Renmin University of China, and Xi’an Jiaotong University. Approval from the IRB of our respective institutions was obtained prior to conducting the field experiment in this study (CUHKSZ-D-20210017). The article has been circulated under the title “Unveiling the Dividend Puzzle: A Field Experiment.” Xie acknowledged the financial support of MYRG-GRG2024-00291(2023-00164), SRG2023-00010, and APAEM/SG/00018/2025 from the University of Macau. Xie acknowledged the financial support of MYRG-GRG2024-00291(2023-00164), SRG2023-00010, and APAEM/SG/00018/2025 from the University of Macau.

Keywords

agency costs
dividend policy
field experiment
investor relations

Access to Document

10.1093/rof/rfaf044

https://academic.oup.com/rof/advance-article/doi/10.1093/rof/rfaf044/8276749

Cite this

@article{2a2f24717688464aa2e275db759105d1,

title = "Investor Communication and Payout Policy : A Field Experiment",

abstract = "We conduct a field experiment to examine whether brief, unsolicited messages can influence corporate dividend policies. Messages highlighting investor concerns rooted in four dividend theories were sent to publicly listed firms. We find that messages framed around agency concerns significantly increase dividend payouts among past payers, particularly those with weaker governance. This effect is robust across alternative specifications and validated by a post-experiment survey. In contrast, messages based on bird-in-hand, signaling, or tax-clientele theories have no significant impact. Our findings suggest that dividend policy is more malleable than traditionally assumed and highlight the role of managerial perceptions in financial decision-making.",

keywords = "agency costs, dividend policy, field experiment, investor relations",

author = "Xiaoqiao WANG and Jing XIE and Bohui ZHANG and Xiaofeng ZHAO",

note = "Publisher Copyright: {\textcopyright} The Author(s) 2025. Published by Oxford University Press on behalf of the European Finance Association.",

year = "2025",

month = nov,

day = "1",

doi = "10.1093/rof/rfaf044",

language = "English",

volume = "29",

pages = "1833--1870",

journal = "Review of Finance",

issn = "1572-3097",

publisher = "Oxford University Press",

number = "6",

}

TY - JOUR

T1 - Investor Communication and Payout Policy : A Field Experiment

AU - WANG, Xiaoqiao

AU - XIE, Jing

AU - ZHANG, Bohui

AU - ZHAO, Xiaofeng

PY - 2025/11/1

Y1 - 2025/11/1

N2 - We conduct a field experiment to examine whether brief, unsolicited messages can influence corporate dividend policies. Messages highlighting investor concerns rooted in four dividend theories were sent to publicly listed firms. We find that messages framed around agency concerns significantly increase dividend payouts among past payers, particularly those with weaker governance. This effect is robust across alternative specifications and validated by a post-experiment survey. In contrast, messages based on bird-in-hand, signaling, or tax-clientele theories have no significant impact. Our findings suggest that dividend policy is more malleable than traditionally assumed and highlight the role of managerial perceptions in financial decision-making.

AB - We conduct a field experiment to examine whether brief, unsolicited messages can influence corporate dividend policies. Messages highlighting investor concerns rooted in four dividend theories were sent to publicly listed firms. We find that messages framed around agency concerns significantly increase dividend payouts among past payers, particularly those with weaker governance. This effect is robust across alternative specifications and validated by a post-experiment survey. In contrast, messages based on bird-in-hand, signaling, or tax-clientele theories have no significant impact. Our findings suggest that dividend policy is more malleable than traditionally assumed and highlight the role of managerial perceptions in financial decision-making.

KW - agency costs

KW - dividend policy

KW - field experiment

KW - investor relations

UR - https://www.scopus.com/pages/publications/105022135397

U2 - 10.1093/rof/rfaf044

DO - 10.1093/rof/rfaf044

M3 - Journal Article (refereed)

SN - 1572-3097

VL - 29

SP - 1833

EP - 1870

JO - Review of Finance

JF - Review of Finance

IS - 6

ER -

Investor Communication and Payout Policy : A Field Experiment

Abstract

Bibliographical note

Funding

Keywords

Access to Document

Other files and links

Fingerprint

Cite this