Dividend Policy of German Firms

German firms pay out a lower proportion of their cash flows than UK and US firms.However, on a published profits basis, the pattern is reversed.Company law provisions and accounting policies account for these conflicting results.A partial adjustment model is used to estimate the implicit target payout ratio and the speed of adjustment of dividends towards a long run target payout ratio. We find that German firms do not base their dividend decisions on published earnings, but on cash flows.The reasons for the use of a cash flow-based payout policy are: (i) published earnings figures do not correctly reflect corporate performance as German firms tend to retain a significant part of their earnings to build up legal reserves, (ii) the conservative nature of German accounting policies, (iii) published earnings are subject to a higher degree of smoothing than cash flows.Regarding the speed of adjustment of dividends towards the long term target payout ratio, UK and US companies only slowly adjust their dividend policy whereas German are more willing to cut the dividend in the wake of a temporary decrease in profitability.This causes a higher degree of 'discreteness' in the dividends-pershare time series as opposed to the 'smoothness' (i.e., frequent annual small adjustments in the dividend per share) observed in the US and the UK.Dividend policy;payout policy;Lintner dividend model;dividend smoothing;partial adjustment model;corporate governance

When do German Firms Change their Dividends?

Anecdotal evidence suggests that the dividend policy of German firms is more flexible than the one of their Anglo-American counterparts.This paper analyses the decision to change the dividend for a panel of 221 German firms from 1984 to 1994.The choice of the period of study is motivated by the fact that at the start of this period there was an economic boom which was followed by a recession.Consistent with the traditional dividend literature, e.g.Lintner (1956), net earnings are key determinants of the decision to change the dividend.However, the study comes up with two findings which are contrary to Lintner (1956) and Miller and Modigliani (1961).First, the level of net earnings is not the only key determinant of the dividend decision, as the occurrence of a loss - whatever its magnitude - has an explanatory power exceeding the one of the level of the loss.Second, dividend cuts or omissions tend to be temporary and the majority of German firms quickly (within two years) revert to their initial dividend level.This stands in marked contrast with DeAngelo et al.(1992) who find that US firms are more likely to reduce their dividend when earnings deteriorate on a permanent basis.Furthermore, the fact that German firms frequently omit and cut their dividend and quickly return to their initial dividend suggests that dividends in Germany have less of a signalling role than dividends in the US and the UK.Our findings also contradict Bhattacharya's (1979) argument that the costs of dividend changes are asymmetric with dividend reductions being more costly to the firm than dividend increases.Finally, we find evidence that firms with banks as their major shareholder are more willing to omit their dividend than firms controlled by other types of shareholder.corporate control;dividend policy;corporate governance;corporate ownership

On the price of morals in markets: an empirical study of the Swedish AP-Funds and the Norwegian Government Pension Fund

This study empirically analyses the exclusion of companies from investors’ investment universe due to a company’s business model (sector-based exclusion) or due to a company’s violations of international norms (normbased exclusion). We conduct a time-series analysis of the performance implications of the exclusion decisions of two leading Nordic investors, Norway’s Government Pension Fund-Global (GPFG) and Sweden’s AP-funds. We find that their portfolios of excluded companies do not generate an abnormal return relative to the funds’ benchmark index. While the exclusion portfolios show higher risk than the respective benchmark, this difference is only statistically significant for the case of GPFG. These findings suggest that the exclusion of the companies generally does not harm funds’ performance. We interpret these findings as indicative that with exclusionary screening, as practiced by the sample funds, asset owners can meet the ethical objectives of their beneficiaries without compromising financial returns

Spatial Analysis of Environmental Factors Related to Lyme Disease in Alabama by Means of NASA Earth Observation Systems

This slide presentation reviews the epidemiology of Lyme Disease that accounts for more than 95% or vector borne diseases in the United States. The history, symptoms and the life cycle of the tick, the transmitting agent of Lyme Disease, a map that shows the cases reported to the CDC between1990 and 2006 and the number of cases in Alabama by year from 1986 to 2007. A NASA project is described, the goals of which are to (1) Demonstrate the presence of the chain of infection of Lyme disease in Alabama (2) Identify areas with environmental factors that support tick population using NASA Earth Observation Systems data in selected areas of Alabama and (3) Increase community awareness of Lyme disease and recommend primary and secondary prevention strategies. The remote sensing methods included: Analyzed Advanced Spaceborne Thermal Emission and Reflection Radiometer (ASTER) and DigitalGlobe Quickbird satellite imagery from summer months and Performed image analyses in ER Mapper 7.1. Views from the ASTER and Quickbird land cover are shown, the Normalized Difference Vegetation Index (NDVI) algorithm was applied to all ASTER and Quickbird imagery. The use of the images to obtain the level of soil moisture is reviewed, and this analysis was used along with the NDVI, was used to identify the areas that support the tick population

Estimating aboveground carbon density and its uncertainty in Borneo's structurally complex tropical forests using airborne laser scanning

Borneo contains some of the world's most biodiverse and carbon-dense tropical forest, but this 750 000 km(2) island has lost 62% of its old-growth forests within the last 40 years. Efforts to protect and restore the remaining forests of Borneo hinge on recognizing the ecosystem services they provide, including their ability to store and sequester carbon. Airborne laser scanning (ALS) is a remote sensing technology that allows forest structural properties to be captured in great detail across vast geographic areas. In recent years ALS has been integrated into statewide assessments of forest carbon in Neotropical and African regions, but not yet in Asia. For this to happen new regional models need to be developed for estimating carbon stocks from ALS in tropical Asia, as the forests of this region are structurally and composition-ally distinct from those found elsewhere in the tropics. By combining ALS imagery with data from 173 permanent forest plots spanning the lowland rainforests of Sabah on the island of Borneo, we develop a simple yet general model for estimating forest carbon stocks using ALS-derived canopy height and canopy cover as input metrics. An advanced feature of this new model is the propagation of uncertainty in both ALS- and ground-based data, allowing uncertainty in hectare-scale estimates of carbon stocks to be quantified robustly. We show that the model effectively captures variation in aboveground carbon stocks across extreme disturbance gradients spanning tall dipterocarp forests and heavily logged regions and clearly outperforms existing ALS-based models calibrated for the tropics, as well as currently available satellite-derived products. Our model provides a simple, generalized and effective approach for mapping forest carbon stocks in Borneo and underpins ongoing efforts to safeguard and facilitate the restoration of its unique tropical forests.Peer reviewe