This paper investigates how flexibility in payout decisions affects firm innovation. Firms which make payout mainly in the form of share repurchase have greater flexibility in making payouts compared to firms which make payout mainly in the form of dividends. I show that firms with greater...

This paper investigates how flexibility in payout decisions affects firm innovation. Firms that make payout mainly in the form of share repurchase have greater flexibility in making payouts compared to firms that make payout mainly in the form of dividends. I show that firms with greater payout...