TITLE:
Financing Investment under Uncertainty: The Case of Payout Reductions in Globally Listed Maritime Firms
AUTHORS:
Ioannis Chasiotis, Maria Giaka, Dimitrios Konstantios, Vasilios-Christos Naoum
KEYWORDS:
Dividend Payouts, Investment, Uncertainty, Maritime Industry, Recession, Shipping Firms
JOURNAL NAME:
Theoretical Economics Letters,
Vol.11 No.6,
December
9,
2021
ABSTRACT: This study explores whether
payout reductions represent an alternative source
of investment funds. We focus on the distinct, financially constrained maritime
sector and draw a sample of 1863 firm-year observations from 143 globally-listed maritime firms during
1987-2020. Investigating the payout reduction-investment nexus, we document a positive
relationship that surfaces in recession periods. Our findings indicate that
payout reductions represent a source of funds for maritime firms in times of
negative external financing shocks.