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Abstract
We investigate the determinants of dividend payments in Belgium between 1838 and 2020. As the institutional environment changes drastically over time, we explore whether the determinants of dividend payments depend on the environment in which firms operate. Large firms, firms that are not informationally opaque, firms with a high share denomination and firms with liquid shares are more likely to pay. However, the importance of these characteristics changed over time. Surprisingly, firms seemingly do not use dividends for signaling. Our results indicate that the omnipresence of universal banks in pre-war Belgium might have lowered the need for a signal.

AbstractWe investigate corporate bond returns for the period 1838–1939 by compiling a unique new database of 201 000 monthly observations of bonds traded on the Brussels Stock Exchange. The value‐weighted annualized total rate of return, net of coupon defaults and taxes, is 4.35 per cent in nominal terms and 2.81 per cent in real terms. Estimates of average returns show that corporate bonds outperformed equities during the entire nineteenth century. We find that the risk‐adjusted performance of corporate bonds based on Sharpe ratios exceeds that of equities and sovereign bonds during the corporate bond market's first centennial.