{"id":{"repo_id":"ku","oai_identifier":"oai:kuscholarworks.ku.edu:1808/39499"},"canonical_url":"https://search.dev.ndltd.org/etd/ku/oai:kuscholarworks.ku.edu:1808/39499","repository":{"repo_id":"ku","name":"University of Kansas","base_url":"https://kuscholarworks.ku.edu/server/oai/request"},"display":{"title":"Three Essays on Fiscal Stimulus, Corporate Policies, and the Local Economy","abstract":"Over recent decades, large public firms have captured an ever-growing share of U.S. corporate profits. In parallel, payout rates have risen sharply: firms increasingly return profits to shareholders rather than retain them. Together, these two trends have produced a dramatic surge in corporate payout distributions. For example, total dividends and share repurchases by S&P 500 firms reached a record $1.57 trillion in 2024, up from roughly $100 billion in the early 1990s. This rapid increase in payouts raises natural questions: where do these payout proceeds ultimately flow? How do they affect the broader economy?","abstract_html":"Over recent decades, large public firms have captured an ever-growing share of U.S. corporate profits. In parallel, payout rates have risen sharply: firms increasingly return profits to shareholders rather than retain them. Together, these two trends have produced a dramatic surge in corporate payout distributions. For example, total dividends and share repurchases by S&P 500 firms reached a record $1.57 trillion in 2024, up from roughly $100 billion in the early 1990s. This rapid increase in payouts raises natural questions: where do these payout proceeds ultimately flow? How do they affect the broader economy?","abstract_has_math":true,"creators":["Xiong, Xun"],"institution":"University of Kansas","degree_name":"Ph.D.","degree_level":null,"degree_discipline":"Business","degree_department":null,"school":null,"contributors":[],"advisors":["Mihov, Atanas","Meschke, Felix"],"committee_chairs":[],"committee_members":[],"year":2026,"date_issued":"2026-05-31","date_published":"2026-05-31","updated_at":"2026-07-24T02:47:15Z","subjects":["Corporate innovation","Corporate payout policy","Fiscal stimulus","House prices","Local economy","Shareholder tax cut"],"languages":["en"],"rights":[],"rights_urls":[],"identifier_entries":[{"key":"dc:identifier.other","label":"Dc Identifier Other","values":["https://www.proquest.com/LegacyDocView/DISSNUM/32698362"],"render_values":[{"text":"https://www.proquest.com/LegacyDocView/DISSNUM/32698362","href":"https://www.proquest.com/LegacyDocView/DISSNUM/32698362","code":true}]}]},"links":{"outbound_url":"https://hdl.handle.net/1808/39499","outbound_label":"Handle","outbound_source":"dc:identifier.uri"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.advisor","label":"Advisor","values":["Mihov, Atanas","Meschke, Felix"]},{"key":"dc:creator","label":"Author","values":["Xiong, Xun"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.accessioned","label":"Dc Date Accessioned","values":["2026-07-20T19:11:30Z"]},{"key":"dc:date.available","label":"Dc Date Available","values":["2026-07-20T19:11:30Z"]},{"key":"dc:date.issued","label":"Date","values":["2026-05-31"]},{"key":"dc:publisher","label":"Institution","values":["University of Kansas"]},{"key":"dc:type","label":"Dc Type","values":["Dissertation"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Business"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Corporate innovation","Corporate payout policy","Fiscal stimulus","House prices","Local economy","Shareholder tax cut"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language.iso","label":"Language (ISO)","values":["en"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.other","label":"Dc Identifier Other","values":["https://www.proquest.com/LegacyDocView/DISSNUM/32698362"]},{"key":"dc:identifier.uri","label":"Identifier URI","values":["https://hdl.handle.net/1808/39499"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["Over recent decades, large public firms have captured an ever-growing share of U.S. corporate profits. In parallel, payout rates have risen sharply: firms increasingly return profits to shareholders rather than retain them. Together, these two trends have produced a dramatic surge in corporate payout distributions. For example, total dividends and share repurchases by S&P 500 firms reached a record $1.57 trillion in 2024, up from roughly $100 billion in the early 1990s. This rapid increase in payouts raises natural questions: where do these payout proceeds ultimately flow? How do they affect the broader economy?","Existing research has extensively documented the corporate side of the equation --- how payouts respond to taxes, agency problems, and financing conditions --- but the downstream question of how these proceeds flow through household investors into different sectors of the real economy has received far less attention. Understanding these payout flows and potential effects is critical for evaluating the broader economic consequences of corporate payout policies and can provide practical implications for ongoing policy debates over payout taxes. This dissertation traces how corporate payout proceeds flow through household investors into local labor markets, real estate markets, and the equity financing of innovative firms.","The first chapter examines whether payout income received by local household investors stimulates job creation and business formation in the counties where they reside. Using IRS county-level dividend income data, I employ a shift-share instrumental variable strategy and a difference-in-differences design exploiting special dividend payments tied to anticipated tax expirations around 2010 and 2012. I find robust evidence that an increase in county-level dividend income supports local net job creation and other dimensions of local economic activity. Two channels drive this result: households consume dividend proceeds locally, boosting demand in nontradable sectors, and deposit a portion of the proceeds into local banks, expanding credit supply and lending to small businesses. Overall, the findings suggest that corporate payouts facilitate capital reallocation from mature public firms to the local economy, implying that policies limiting payouts may have unintended consequences.","The second chapter, coauthored with Leming Lin and Atanas Mihov, examines how payout proceeds flow into real estate markets. Exploiting cross-county variation in stock market exposure in a difference-in-differences framework around the 2003 shareholder tax cut, which substantially increased investors' disposable incomes, we find that counties with greater stock market exposure experienced significantly faster house price appreciation following the tax cut. These effects operate through two complementary channels: the direct income boost from lower dividend and capital gains taxes, and the surge in corporate payouts following JGTRRA, which increased household cash flows and likely prompted portfolio rebalancing from equities toward housing. Together, these findings suggest that the Bush-era tax cuts contributed to rising house prices during the early 2000s housing boom.","The third chapter, coauthored with Zhaozhao He and Jide Wintoki, examines whether corporate payout proceeds are reallocated back into the equity market in a way that benefits other firms. The key idea is that the 2003 shareholder tax cut created two simultaneous effects. It induced large, cash-rich firms to increase payouts, while lowering the cost of external equity for financially constrained firms that rely on new equity issuance to fund investment, creating a channel through which capital flows from mature firms toward younger, high-growth firms with limited internal funds. Using a difference-in-differences design, we find that financially constrained firms experience a significantly larger decline in the cost of equity, increase R&D investment more strongly, and produce patents with greater citation impact and shareholder value. Evidence shows that financially constrained firms increase equity issuance while unconstrained firms respond to the tax cut by primarily increasing payouts, which supports the capital reallocation mechanism.","Taken together, the three essays establish that profits concentrated in large public firms are redistributed to support broader economic activity. When investors spend or deposit payout proceeds locally, these flows stimulate employment and small business growth. When investors rebalance their portfolios, payout flows accelerate housing demand. When public firms need external equity and issue new shares, payouts can flow back into the equity market and support the development of firms with growth opportunities. Overall, the findings suggest that corporate payouts play a critical role in facilitating capital reallocation from mature public firms to other parts of the economy."]},{"key":"dc:title","label":"Title","values":["Three Essays on Fiscal Stimulus, Corporate Policies, and the Local Economy"]}]}],"canonical_facts":{"dc:contributor.advisor":["Mihov, Atanas","Meschke, Felix"],"dc:creator":["Xiong, Xun"],"dc:date.accessioned":["2026-07-20T19:11:30Z"],"dc:date.available":["2026-07-20T19:11:30Z"],"dc:date.issued":["2026-05-31"],"dc:description.abstract":["Over recent decades, large public firms have captured an ever-growing share of U.S. corporate profits. In parallel, payout rates have risen sharply: firms increasingly return profits to shareholders rather than retain them. Together, these two trends have produced a dramatic surge in corporate payout distributions. For example, total dividends and share repurchases by S&P 500 firms reached a record $1.57 trillion in 2024, up from roughly $100 billion in the early 1990s. This rapid increase in payouts raises natural questions: where do these payout proceeds ultimately flow? How do they affect the broader economy?","Existing research has extensively documented the corporate side of the equation --- how payouts respond to taxes, agency problems, and financing conditions --- but the downstream question of how these proceeds flow through household investors into different sectors of the real economy has received far less attention. Understanding these payout flows and potential effects is critical for evaluating the broader economic consequences of corporate payout policies and can provide practical implications for ongoing policy debates over payout taxes. This dissertation traces how corporate payout proceeds flow through household investors into local labor markets, real estate markets, and the equity financing of innovative firms.","The first chapter examines whether payout income received by local household investors stimulates job creation and business formation in the counties where they reside. Using IRS county-level dividend income data, I employ a shift-share instrumental variable strategy and a difference-in-differences design exploiting special dividend payments tied to anticipated tax expirations around 2010 and 2012. I find robust evidence that an increase in county-level dividend income supports local net job creation and other dimensions of local economic activity. Two channels drive this result: households consume dividend proceeds locally, boosting demand in nontradable sectors, and deposit a portion of the proceeds into local banks, expanding credit supply and lending to small businesses. Overall, the findings suggest that corporate payouts facilitate capital reallocation from mature public firms to the local economy, implying that policies limiting payouts may have unintended consequences.","The second chapter, coauthored with Leming Lin and Atanas Mihov, examines how payout proceeds flow into real estate markets. Exploiting cross-county variation in stock market exposure in a difference-in-differences framework around the 2003 shareholder tax cut, which substantially increased investors' disposable incomes, we find that counties with greater stock market exposure experienced significantly faster house price appreciation following the tax cut. These effects operate through two complementary channels: the direct income boost from lower dividend and capital gains taxes, and the surge in corporate payouts following JGTRRA, which increased household cash flows and likely prompted portfolio rebalancing from equities toward housing. Together, these findings suggest that the Bush-era tax cuts contributed to rising house prices during the early 2000s housing boom.","The third chapter, coauthored with Zhaozhao He and Jide Wintoki, examines whether corporate payout proceeds are reallocated back into the equity market in a way that benefits other firms. The key idea is that the 2003 shareholder tax cut created two simultaneous effects. It induced large, cash-rich firms to increase payouts, while lowering the cost of external equity for financially constrained firms that rely on new equity issuance to fund investment, creating a channel through which capital flows from mature firms toward younger, high-growth firms with limited internal funds. Using a difference-in-differences design, we find that financially constrained firms experience a significantly larger decline in the cost of equity, increase R&D investment more strongly, and produce patents with greater citation impact and shareholder value. Evidence shows that financially constrained firms increase equity issuance while unconstrained firms respond to the tax cut by primarily increasing payouts, which supports the capital reallocation mechanism.","Taken together, the three essays establish that profits concentrated in large public firms are redistributed to support broader economic activity. When investors spend or deposit payout proceeds locally, these flows stimulate employment and small business growth. When investors rebalance their portfolios, payout flows accelerate housing demand. When public firms need external equity and issue new shares, payouts can flow back into the equity market and support the development of firms with growth opportunities. Overall, the findings suggest that corporate payouts play a critical role in facilitating capital reallocation from mature public firms to other parts of the economy."],"dc:identifier.other":["https://www.proquest.com/LegacyDocView/DISSNUM/32698362"],"dc:identifier.uri":["https://hdl.handle.net/1808/39499"],"dc:language.iso":["en"],"dc:publisher":["University of Kansas"],"dc:subject":["Corporate innovation","Corporate payout policy","Fiscal stimulus","House prices","Local economy","Shareholder tax cut"],"dc:title":["Three Essays on Fiscal Stimulus, Corporate Policies, and the Local Economy"],"dc:type":["Dissertation"],"thesis:degree_discipline":["Business"],"thesis:degree_name":["Ph.D."]},"updated_at":"2026-07-24T02:47:15Z"}