This paper investigates the influence of external cost shock on the speed of adjustment (SOA) toward target capital structure. To look at the impact of an exogenous shock on the speed of adjustment, we employ mandatory contributions (MCs) of defined benefit (DB) pension plans as a measure of the...

This study tests catering theory of dividend policies in twenty-one countries from 1991 to 2017. First, we show that there are important differences in corporate dividend policies across countries. Second, we find that the catering incentive is stronger when investor sentiment is low. Third,...