Working Paper
Executive financial incentives and payout policy: firm responses to the 2003 dividend tax cut
Weisbenner, Scott; Brown, Jeffrey R.; Liang, J. Nellie (2006)
Using the 2003 reduction in dividend tax rates to identify an exogenous change in the after-tax value of dividends to shareholders, we test whether stock holdings among company executives is an important determinant of payout policy. We have three primary findings. First, we find that when top executives have greater stock ownership, and thus an incentive to increase dividends for personal liquidity reasons, there is a significantly greater likelihood of a dividend increase following the 2003 dividend tax cut, whereas no such relation existed in the prior decade when the dividend tax rate was ...
Finance and Economics Discussion Series , Paper 2006-14

Working Paper
401(k) matching contributions in company stock: costs and benefits for firms and workers
Weisbenner, Scott; Brown, Jeffrey R.; Liang, J. Nellie (2004)
This paper examines why some employers provide matching contributions to 401(k) plans in company stock and explores the implications of match policy for employee retirement wealth. Unlike stock option grants to non-executives, a firm's decision to match in company stock does not appear to be strongly correlated with cash flow or with measures of the benefits of aligning incentives of employees and employers. Rather, we find evidence that firms are more likely to provide the match in company stock if firm risk is low (i.e. lower stock price volatility and lower bankruptcy risk) and employees ...
Finance and Economics Discussion Series , Paper 2004-23

Working Paper
The geography of stock market participation: the influence of communities and local firms
Weisbenner, Scott; Smith, Paul A.; Brown, Jeffrey R.; Ivković, Zoran (2004)
This paper is the first to investigate the importance of geography in explaining equity market participation. We provide evidence to support two distinct local area effects. The first is a community ownership effect, that is, individuals are influenced by the investment behavior of members of their community. Specifically, a ten percentage-point increase in equity market participation of the other members of one's community makes it two percentage points more likely that the individual will invest in stocks, conditional on a rich set of controls. We find further evidence that the influence of ...
Finance and Economics Discussion Series , Paper 2004-22