| Summary: | 碩士 === 國立政治大學 === 應用經濟與社會發展英語碩士學位學程(IMES) === 106 === This paper uses an exogenous change of 2010 corporate tax reform in Taiwan to identify the causal effect of corporate income tax on dividend payout ratio. I combine shareholder-level and firm-level tax return data to examine the reform-induced change in dividend payout ratio. Additionally, an instrumental variables (IV) strategy is applied in this study to address the endogeneity between corporate income tax and dividend payout ratio. This paper gets three findings as follows. First, for full sample, corporate income tax is found to have a positive effect on dividend payout ratio. Second, for subgroups composed of firms dominated by non-individual shareholders, corporate income tax does not have an impact on dividend payout ratio. Finally, for subgroups consisting of firms dominated by individual shareholders, corporate income tax is found to have a positive effect on dividend payout ratio; the result supports the clientele effect as the effect is the same as the tax preference for domestic individual shareholders.
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