{"id":{"repo_id":"mit","oai_identifier":"oai:dspace.mit.edu:1721.1/66442"},"canonical_url":"https://search.dev.ndltd.org/etd/mit/oai:dspace.mit.edu:1721.1/66442","repository":{"repo_id":"mit","name":"MIT","base_url":"https://dspace.mit.edu/oai/request"},"display":{"title":"Fire the caterer : a test of catering theory for corporate dividend payout policy","abstract":"We propose that the catering theory of dividends will not hold when tested with an extended sample period, different formulations of the dividend premium, and subsets of our sample divided by industry. The catering theory implies that managers cater to irrational and timevarying investor demand for dividends. This demand can be proxied by a dividend premium, a comparison of the market-to-book ratio of payers versus non-payers. The dividend premium that the catering model is based on suffers from a very arbitrary derivation. We find that coefficients for the regression of catering using an extended sample period and different derivations of the dividend premium give results with smaller economic and statistical significance. Furthermore, tests of our sample by industry show that the dividend premium, supposedly a market-wide measure that affects all firms, has different effects on various industries. Though the catering theory finds significance given a particular methodology, further analysis shows that the model is based on spurious correlation, and not true causation.","abstract_html":"We propose that the catering theory of dividends will not hold when tested with an extended sample period, different formulations of the dividend premium, and subsets of our sample divided by industry. The catering theory implies that managers cater to irrational and timevarying investor demand for dividends. This demand can be proxied by a dividend premium, a comparison of the market-to-book ratio of payers versus non-payers. The dividend premium that the catering model is based on suffers from a very arbitrary derivation. We find that coefficients for the regression of catering using an extended sample period and different derivations of the dividend premium give results with smaller economic and statistical significance. Furthermore, tests of our sample by industry show that the dividend premium, supposedly a market-wide measure that affects all firms, has different effects on various industries. Though the catering theory finds significance given a particular methodology, further analysis shows that the model is based on spurious correlation, and not true causation.","abstract_has_math":false,"creators":["Lue, Alexander W"],"institution":"Massachusetts Institute of Technology","degree_name":null,"degree_level":null,"degree_discipline":null,"degree_department":"Massachusetts Institute of Technology. Dept. of Electrical Engineering and Computer Science.","school":null,"contributors":[],"advisors":["Paul Asquith."],"committee_chairs":[],"committee_members":[],"year":2011,"date_issued":"2011","date_published":"2011","updated_at":"2026-07-22T22:22:06Z","subjects":["Electrical Engineering and Computer Science."],"languages":["eng"],"rights":["M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission."],"rights_urls":["http://dspace.mit.edu/handle/1721.1/7582"],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/1721.1/66442","outbound_label":"Handle","outbound_source":"dc:identifier.uri"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.advisor","label":"Advisor","values":["Paul Asquith."]},{"key":"dc:contributor.department","label":"Department","values":["Massachusetts Institute of Technology. Dept. of Electrical Engineering and Computer Science."]},{"key":"dc:contributor.other","label":"Dc Contributor Other","values":["Massachusetts Institute of Technology. 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They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission."]},{"key":"dc:rights.uri","label":"Rights URI","values":["http://dspace.mit.edu/handle/1721.1/7582"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.uri","label":"Identifier URI","values":["http://hdl.handle.net/1721.1/66442"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Thesis (M. Eng.)--Massachusetts Institute of Technology, Dept. of Electrical Engineering and Computer Science, 2011.","Cataloged from PDF version of thesis.","Includes bibliographical references (p. [37])."]},{"key":"dc:description.abstract","label":"Abstract","values":["We propose that the catering theory of dividends will not hold when tested with an extended sample period, different formulations of the dividend premium, and subsets of our sample divided by industry. The catering theory implies that managers cater to irrational and timevarying investor demand for dividends. This demand can be proxied by a dividend premium, a comparison of the market-to-book ratio of payers versus non-payers. The dividend premium that the catering model is based on suffers from a very arbitrary derivation. We find that coefficients for the regression of catering using an extended sample period and different derivations of the dividend premium give results with smaller economic and statistical significance. Furthermore, tests of our sample by industry show that the dividend premium, supposedly a market-wide measure that affects all firms, has different effects on various industries. Though the catering theory finds significance given a particular methodology, further analysis shows that the model is based on spurious correlation, and not true causation."]},{"key":"dc:description.degree","label":"Dc Description Degree","values":["M.Eng."]},{"key":"dc:title","label":"Title","values":["Fire the caterer : a test of catering theory for corporate dividend payout policy"]}]}],"canonical_facts":{"dc:contributor.advisor":["Paul Asquith."],"dc:contributor.department":["Massachusetts Institute of Technology. Dept. of Electrical Engineering and Computer Science."],"dc:contributor.other":["Massachusetts Institute of Technology. Dept. of Electrical Engineering and Computer Science."],"dc:creator":["Lue, Alexander W"],"dc:date.accessioned":["2011-10-17T21:26:28Z"],"dc:date.available":["2011-10-17T21:26:28Z"],"dc:date.issued":["2011"],"dc:description":["Thesis (M. Eng.)--Massachusetts Institute of Technology, Dept. of Electrical Engineering and Computer Science, 2011.","Cataloged from PDF version of thesis.","Includes bibliographical references (p. [37])."],"dc:description.abstract":["We propose that the catering theory of dividends will not hold when tested with an extended sample period, different formulations of the dividend premium, and subsets of our sample divided by industry. The catering theory implies that managers cater to irrational and timevarying investor demand for dividends. This demand can be proxied by a dividend premium, a comparison of the market-to-book ratio of payers versus non-payers. The dividend premium that the catering model is based on suffers from a very arbitrary derivation. We find that coefficients for the regression of catering using an extended sample period and different derivations of the dividend premium give results with smaller economic and statistical significance. Furthermore, tests of our sample by industry show that the dividend premium, supposedly a market-wide measure that affects all firms, has different effects on various industries. Though the catering theory finds significance given a particular methodology, further analysis shows that the model is based on spurious correlation, and not true causation."],"dc:description.degree":["M.Eng."],"dc:identifier.uri":["http://hdl.handle.net/1721.1/66442"],"dc:language.iso":["eng"],"dc:publisher":["Massachusetts Institute of Technology"],"dc:rights":["M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission."],"dc:rights.uri":["http://dspace.mit.edu/handle/1721.1/7582"],"dc:subject":["Electrical Engineering and Computer Science."],"dc:title":["Fire the caterer : a test of catering theory for corporate dividend payout policy"],"dc:type":["Thesis"]},"updated_at":"2026-07-22T22:22:06Z"}