Graduation Year

2026

Date of Submission

11-2025

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics-Accounting

Second Department

Economics

Reader 1

Andrew Finley

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

2025 Carson T Bloom

Abstract

Abstract

The Tax Cuts and Jobs Act (TCJA) provided corporations an estimated $233 billion in tax savings, yet relatively little is known about how firms allocated this cash windfall. This study examines whether growth and mature firms differed in whether they used these tax savings to distribute dividends and repurchase shares. Using panel data on publicly traded North American firms from 2016–2019, I classify firms as either growth or mature based on their cash-flow patterns and estimate the effects of the TCJA on their behavior using a difference-in-differences design.

The results indicate that mature firms increased shareholder payouts significantly more than growth firms after the TCJA. On average mature firms returned an additional $2.76 per $1,000 in total assets per year between 2018 and 2019 through dividends and repurchases. Industry controls show substantial variation in payout behavior, with sectors such as Information Technology, Healthcare, and Materials exhibiting significantly different payout levels relative to Energy, the omitted category. An increase in shareholder payouts following the TCJA may have amplified the distribution of its benefits toward those who hold the most corporate stock. Furthermore, my results support existing literature that has found more mature firms tend to have fewer growth opportunities, and that growth opportunities are inversely correlated with shareholder payouts.

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