Dividends, investment and pension contributions

Tucker, Jon; Misirlioglu, Ismail Ufuk

Abstract

We study the determinants of pension contributions for UK listed companies to better understand how the contributions decision is placed within the wider operational and strategic framework of the company. We model the potential displacement effect of discretionary pension deficit contributions in relation to corporate investment and dividends and find a significant displacement effect in relation to both which is further strengthened for dividends during periods of poor firm performance and financial constraints. Our results imply that the firms dividend payout and investment policies significantly influence its propensity to make extra pension contributions.

• Journal Article Type: Article
• Acceptance Date: May 19, 2023
• Online Publication Date: Mar 1, 2024
• Publication Date: Mar 1, 2024
• Deposit Date: Aug 3, 2023
• Publicly Available Date: Mar 2, 2025
• Journal: International Journal of Banking, Accounting and Finance
• Print ISSN: 1755-3830
• Electronic ISSN: 1755-3849
• Publisher: Inderscience
• Peer Reviewed: Peer Reviewed
• Volume: 14
• Issue: 1
• Pages: 1-27
• DOI: https://doi.org/10.1504/IJBAAF.2024.137080
• Keywords: Pension contributions; investment; dividends
• Public URL: https://uwe-repository.worktribe.com/output/10975879
• Publisher URL: https://www.inderscience.com/info/ingeneral/forthcoming.php?jcode=ijbaaf