Dividend Policy and Capital Market Theory: A Comment

Abstract

as regards the relative strengths of the coefficients of the exporting versus importing countries. The results of equation (2), while interesting, may be weak because of the crude nature of the restriction data and the possible inappropriate grouping of the restriction data according to mode of operation.7 Equation (1) is quite credible in the sense that a count of the existence of up to 12 possible restrictive practices could give an indication of a country's tendency to contract its traded goods sector by various policy measures. However, it is not surprising that an attempt to disaggregate this type of data into three separate variables in equation (2) was less successful. The regression results indicate that country practices restricting exchange rates, trade, and payments do affect trade flows among OECD countries. The fact that relatively significant results were obtained with very crude data suggests that bilateral trade flow models should include variables measuring these practices. Perhaps future reas regards the relative strengths of the coefficients of the exporting versus importing countries. The results searchers will attempt to create better quantitative measures of these types of restriction practices.