Should State-Owned Enterprises Pay Dividends?
Should State-Owned Enterprises Pay Dividends?

Author(s): Spartak Keremidchiev
Subject(s): Politics / Political Sciences, Politics, Economy, Business Economy / Management, Economic policy, Public Finances
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: dividend puzzle; state-owned enterprises; dividend policy; Bulgaria
Summary/Abstract: The dividend puzzle for private corporations has a long-lasting history. Six theories provide to certain extent explanations of this puzzle. However, the dividend puzzle has not yet been discussed as an economic problem for state-owned enterprises (SOEs). The article addresses this issue. All well-known six theoretical concepts of the dividend puzzle are presented and their strengths and weaknesses are analysed. After that, the specific features of SOEs are brought out and the dividend puzzle for them is formulated. After presenting the experience of the dividend policy of SOEs, a confrontation with the theories is made. It is proved that only the theory of dividend payment preference is relevant to SOEs.

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