THE CAUSALITY AMONG SOUTH KOREAN FIRMS EARNINGS, DIVIDEND POLICY, AND INVESTMENT DECISION
This paper examines the causality among earnings, dividends and investment using the Granger-causality model. Using a sample of publicly traded South Korean manufacturing companies, we find that investments cause earnings. We also find that earnings cause dividends and investments cause dividends. T...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
People & Global Business Association (P&GBA)
2006-06-01
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| Series: | Global Business and Finance Review |
| Subjects: | |
| Online Access: | http://www.gbfrjournal.org/pds/journal/thesis/20150624112649-BQCN2.pdf |
| Summary: | This paper examines the causality among earnings, dividends and investment using the Granger-causality model. Using a sample of publicly traded South Korean manufacturing companies, we find that investments cause earnings. We also find that earnings cause dividends and investments cause dividends. These findings are supportive of non0trivial agency costs, asymmetric information, and their implications. The finding imply that corporate financial decisions should be analyzed within a simultaneous model framework. |
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| ISSN: | 1088-6931 2384-1648 |