Vol. 28 No.1 -06

Volume 28 Number 1, 2023

Investor Income and Local Dividend Clienteles

Erdem Ucar
California State University Fullerton, College of Business and Economics.
SGMH5189, 800 N. State College Blvd., Fullerton, CA 92831


I use a quasi-natural experiment setting and examine whether geographically-varying investors’ income needs, proxied by local disasters, affect dividend payout. Firms located in areas severely impacted by local disasters are more likely to be dividend payers, initiate dividends, and have higher dividend yields. I introduce a new local dividend clientele effect induced by income needs. This effect is consistent with the notion that natural disasters generate local economic shocks, leading to a greater need for income among local investors within affected areas. These results are also stronger for firms primarily held by local investors in line with their greater influence on corporate policies.


JEL Classification: G35, G30, G39 


Keywords: dividend policy, investor income, local dividend clienteles, natural disasters  



Cite this article: 

Ucar, E., 2023, Investor Income and Local Dividend Clienteles, International Journal of Business, 28(1), 006. https://doi.org/10.55802/IJB.028(1).006


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