Abstract

Evidence on the effects of being subject to the Mandatory Dividend Rules (MDR) is limited, and even more so on investment opportunities under uncertainty. Based on 445 companies spread across 20 countries, we will analyze that under uncertainty conditions, companies subject to MDR will have their investment opportunities more diminished than firms without MDR. Using panels and statistical matching, we find evidence in line with the above, suggesting that being exposed to MDR does not favor investment opportunities and even less so in the presence of uncertainty. Our findings are relevant for policymakers.