scholarly journals Information Asymmetry and Dividend Policy: The Consequences of Dividend Signaling Hypothesis

2010 ◽  
Vol 9 (1) ◽  
pp. 99-124
Author(s):  
Byoung Gon Kim ◽  
김동욱 ◽  
Dong Hoe Kim
Keyword(s):  
Information Asymmetry ◽  
Dividend Policy ◽  
Dividend Signaling ◽  
Signaling Hypothesis

scholarly journals Dividend Smoothing And The Long-Run Stability Between Dividends And Earnings In Korea

2011 ◽  
Vol 8 (3) ◽  
Author(s):  
Jin-Ho Jeong
Keyword(s):  
Information Asymmetry ◽  
Stock Exchange ◽  
Series Data ◽  
Annual Series ◽  
Signaling Model ◽  
Long Run ◽  
Dividend Signaling ◽  
Dividend Smoothing ◽  
Signaling Hypothesis ◽  
Insight Into

There have been no empirical attempts to estimate and verify the dividend-earnings relation reflecting both the signaling and dividend smoothing hypotheses. This study proposed a cointegration model to test both hypotheses in an integrated framework in order to provide better insight into the dividend and earning relation. We are particularly interested in the issue of whether the model can detect a presence of inter-temporal relations between dividends and earnings. The implications of the signaling model and smoothing model of dividends were empirically tested using the recent 26 annual series data of dividends and earnings up to year 2006 for 226 firms listed on the Korea Stock Exchange. The results of t-test and logistic regression show that the presence of cointegration is positively related to the degree of information asymmetry, a result consistent with the dividend signaling hypothesis. In addition, dividend smoothing is identified as an underlying force to make dividends and earnings cointegrated.

Does earnings transparency affect corporate payout decisions?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yogesh Chauhan ◽  
Rajesh Pathak
Keyword(s):  
Path Analysis ◽  
Fixed Effects ◽  
Financial Constraints ◽  
Dividend Policy ◽  
Cash Dividend ◽  
Content Type ◽  
Listed Firms ◽  
Panel Data Estimation ◽  
Signaling Hypothesis ◽  
Data Estimation

PurposeThe paper examines how earnings transparency affects dividend payouts for Indian firms. The authors also explore the channels through which earnings transparency affects dividend payouts.Design/methodology/approachThe authors employ panel data estimation with fixed effects to examine the role of earnings transparency on dividend payouts. The authors also use path analysis to explore causation. The paper uses a sample of more than 2000 Indian listed firms, over the period 2001–2016.FindingsThe authors report that firms showing grater earning transparency pay more cash dividend. Their results do not support the signaling hypothesis about the dividend. However, these results provide explicit support to the theory that corporate dividend policy is an outcome of information asymmetry. Moreover, the path analysis reveals the effect of earnings transparency on corporate payout through the financial constraint channel. The results are robust to idiosyncratic controls; alternate measures of payout; alternate models; endogeneity concerns; and the alternate channel of returning money to stockholders.Practical implicationsManagers should also examine earnings transparency while formulating an adequate dividend policy for their firms. This study also helps investors to identify dividend-paying stocks.Originality/valueThis study particularly contributes to the literature examining the effect of earnings quality on dividend payouts through its effect on financial constraints. We, therefore, connect two streams of research that contemplate the relation between accounting-based information variables and dividend payouts and the relationship between financial constraints and dividend payouts. Moreover, using path analysis uniquely, the authors provide evidence on the relative importance of both the direct and the indirect link.

scholarly journals Information asymmetry, government ownership, and dividends from the building construction from Indonesia

2020 ◽  
Vol 10 (6) ◽  
pp. 3-8
Author(s):  
Musdalifah Azis ◽  
Siti Amalia ◽  
Dio Caisar Darma
Keyword(s):  
Information Asymmetry ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Total Sample ◽  
Government Ownership ◽  
Panel Data Regression ◽  
Data Regression ◽  
Policy Information ◽  
Negative Effect ◽  
The Relationship

This study investigated to examine the relationship between information asymmetry and government ownership to dividend policy. Information asymmetry is measured using bid-ask spreads, while government ownership is measured using the number of government shares divided by the number of outstanding shares multiplied by 100 %. This study uses purposive sampling with a total sample of 9 sub-companies construction and building listed on the Indonesia Stock Exchange (ISE) in 2016-2019. The data used is quantitative data and data sources were taken from the company's annual financial statements. Descriptive statistics and panel data regression are used as data analysis tools. The results showed that information asymmetry has a positive and significant effect on dividend policy, government ownership does not have a significant negative effect on dividend policy, and the interaction of information asymmetry and government ownership moderates the dividend policy.

Information asymmetry and dividend policy of Sarbanes-Oxley Act

2020 ◽  
Vol 47 (6) ◽  
pp. 1507-1532
Author(s):  
Mostafa Harakeh ◽  
Ghida Matar ◽  
Nagham Sayour
Keyword(s):  
Asymmetric Information ◽  
Information Asymmetry ◽  
Financial Economics ◽  
Dividend Policy ◽  
Potential Effect ◽  
Control Group ◽  
Reverse Causality ◽  
Publicly Traded ◽  
Content Type ◽  
Sarbanes Oxley

PurposeThe literature of financial economics documents a causal relationship between the level of information asymmetry in the firm and its dividend policy. Nevertheless, this relationship suffers endogeneity problems arising from reverse causality and omitted variable bias. The purpose of this study is to examine how the dividend policy reacts to changes in asymmetric information in an exogenous research setting.Design/methodology/approachTo overcome endogeneity concerns, the authors employ the enactment of the Sarbanes-Oxley Act (SOX) in the US in 2002 as a source of an exogenous variation in the level of information asymmetry to study the potential effect that this variation might have on the dividend policy. In doing so, we utilize a difference-in-differences research design, in which the treatment group is US publicly traded firms that were exposed to the policy and the control group is publicly traded companies in the UK where SOX was not enacted. Both countries have similar institutional settings and enforcement of laws, which makes them comparable in this research context.FindingsThe authors’ findings show that, compared to UK companies, US firms increase their dividend payments following a reduction in asymmetric information as a result of the SOX enactment.Originality/valueThe study contributes to the literature of financial economics by showing that policy makers can mitigate agency conflicts and protect shareholders by improving the corporate information environment and reducing asymmetric information.

scholarly journals Pengaruh Asimetri Informasi Pada Kebijakan Dividen Dengan Investment Opportunity Set Sebagai Variabel Pemoderasi

2018 ◽  
pp. 2040
Author(s):  
Ni Putu Linda Yasmita ◽  
Anak Agung Gde Putu Widanaputra
Keyword(s):  
Information Asymmetry ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Investment Opportunity ◽  
Dividend Payout ◽  
Asymmetry Of Information ◽  
Investment Opportunity Set ◽  
Investment Opportunities ◽  
High Investment ◽  
A Company

The purpose of this study is to obtain empirical evidence of investment opportunity capability sets to moderate the influence of information asymmetry on dividend policy. This research was conducted at a manufacturing company listed on Indonesia Stock Exchange 2014-2016. Sampling method used is purposive sampling. The sample size is 30 with 72 observations. Technique Data analysis used is test of Moderated Regression Analysis (MRA). Based on the results of the analysis, it is known that the investment opportunity set is not as a moderator of the influence of information asymmetry on the dividend policy. This suggests that when firms have high investment opportunities with high levels of asymmetry, it is not necessarily that the company will pay low dividends or not share them to the shareholders, since management will manage earnings annually as reserves to be reinvested without reducing the proportion of dividend payout to investors. This study provides implications for investors as a consideration in investing in a company to see how the bid ask and dividend payout ratio of the company's shares. Keywords: asymmetry of information, investment opportunity set, dividend policy

BANK EARNINGS MANAGEMENT AND DIVIDEND POLICY UNDER AGENCY PROBLEM CONTEXTS

2020 ◽  
Vol 15 (02) ◽  
pp. 2050005
Author(s):  
DUNG VIET TRAN
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Dividend Policy ◽  
Bank Holding Companies ◽  
Holding Companies ◽  
Additional Information ◽  
Discretionary Behaviors ◽  
The Impact ◽  
High Information

Using a large sample of U.S. bank holding companies (BHC) from 2000:Q1–2017:Q4, we investigate the impacts of dividend policy to bank earnings management, and document that banks that pay dividends tend to be less opaque than banks that do not pay dividends. The dividend policy not only impacts the conditional average earnings management of banks, but also exerts influence on their dispersion. The impact of dividend policy appears to be more profound for highly opaque banks. We identify different conditions that motivate different discretionary behaviors of banks, which allows us to better observe different managerial motives between dividend-paying and dividend-non-paying banks. Under high information asymmetry context, there is valuably additional information conveyed by paying dividends, and it follows that the role of dividends as a means of conveying information is more pronounced. For banks subject to high agency problems, paying dividends make them to be less opaque through reducing the discretionary behaviors.

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