Profits, dividends and industry restructuring : the Swedish paper and pulp industry between 1945 and 1977

• This paper explores the role of profit distribution in the restructuring of the Swedish paper and pulp industry between 1945 and 1977. In addressing this issue, we will draw on the life-cycle theory and market imperfection arguments to examine whether the less profitable firms shared more of their profits as dividends, or remained on the market longer by reinvesting the majority of the profits. Our study shows that an increasing share of the profits was distributed to owners over time, and thus less profit was reinvested in industrial renewal. We find that the observed general upward trend in dividends can be attributed to the decline in profit and firm legacy, as firms in the Swedish pulp and paper industry kept dividends up while reducing reinvestment as their profit margins decreased over time. Our study shows that the market imperfections related to capital taxation and investment funds increased rather than decreased dividends.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Ekonomisk historia (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economic History (hsv//eng)

SAMHÄLLSVETENSKAP  -- Social och ekonomisk geografi (hsv//swe)

SOCIAL SCIENCES  -- Social and Economic Geography (hsv//eng)

Keyword

life-cycle theory

dividend

market imperfection

paper and pulp industry

ekonomisk historia

Economic History

Social and Economic Geography

kulturgeografi

Ekonomisk historia

Publication and Content Type

ref (subject category)

art (subject category)