Abstract

After a big post-2008 increase in the fraction of firms distributing cash in the U.S.-both as dividends and repurchases-, and the end of the increasing popularity of repurchases in other developed and emerging countries, the share of payers is no longer significantly lower in the U.S. than elsewhere. This convergence is mostly due to changing characteristics of firms in the case of dividends (U.S. firms became larger and more profitable), and an ever-higher propensity to repurchase in the U.S. Differences in agency considerations, transaction costs, and earnings volatility across countries and in time are the key factors explaining the differences in the propensity to pay.