Dividend control

Updated: Aug 20, 2021

Restrictions on the distribution of dividends by firms. These may be imposed as part of a prices and incomes policy; they usually take the form of preventing or limiting increases in dividends. If wages are controlled, political considerations may require a balancing restriction on profits. Profits themselves are hard to control. Dividend controls are not fully parallel to wage controls, as undistributed profits are retained by firms and are available for distribution after the controls are relaxed, but they may be the closest parallel the authorities can employ.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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