Dividends And Share Repurchases In The European Union

Using a unique database of over 4100 listed industrial companies, the authors examine the evolution of cash dividends and share repurchases from 1989 to 2005 in the fifteen nations that were members of the European Union before May 2004. As in the United States, the fraction of European firms paying dividends declines dramatically over this period, while total real dividends paid increase significantly. Most strikingly, share repurchases have surged in the EU, rising to over half the value of cash dividend payments in 2005.