Title: Dividends, investment and pension contributions

Authors: Jon Tucker; Ismail Ufuk Misirlioglu

Addresses: University of the West of England, Frenchay Campus, Coldharbour Lane, Bristol BS16 1QY, UK ' University of the West of England, Frenchay Campus, Coldharbour Lane, Bristol BS16 1QY, UK

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 firm's dividend payout and investment policies significantly influence its propensity to make extra pension contributions.

Keywords: pension contributions; investment; dividends.

DOI: 10.1504/IJBAAF.2024.137080

International Journal of Banking, Accounting and Finance, 2024 Vol.14 No.1, pp.1 - 27

Accepted: 19 May 2023
Published online: 01 Mar 2024 *

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