Dividend policy and earnings management: Do agency problem and financing constraints matter?
The present study aims to examine the relationship between dividend policy and earnings management by explicitly considering the role of the agency problem and financing constraints. The sample comprises 3250 non-financial Chinese listed firms from 2009 to 2018. This study uses fixed- and random eff...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2022-09-01
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| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845022000266 |
| _version_ | 1798000460068552704 |
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| author | Ammar Hussain Minhas Akbar |
| author_facet | Ammar Hussain Minhas Akbar |
| author_sort | Ammar Hussain |
| collection | DOAJ |
| description | The present study aims to examine the relationship between dividend policy and earnings management by explicitly considering the role of the agency problem and financing constraints. The sample comprises 3250 non-financial Chinese listed firms from 2009 to 2018. This study uses fixed- and random effect models as econometric techniques. Dividend policy is measured with dividend yield, payout ratio, large and small dividend payment status. Earnings management is measured with discretionary accruals, which are used as a proxy of accrual-based earnings management. The salient findings of the study are as follows: (1) overall, dividend payments restrict managers' involvement in earnings management practices; (2) compared with small dividend-paying firms, larger dividend-paying firms have less involvement in earnings management practices; (3) the agency problem does not affect the nature of the proposed relationship; (4) the dividend payments of non-financially constrained firms dampen managers’ opportunistic behavior toward earnings management practices and vice versa. |
| first_indexed | 2024-04-11T11:20:37Z |
| format | Article |
| id | doaj.art-655de80fe56b4624bb15086ff781c1bd |
| institution | Directory Open Access Journal |
| issn | 2214-8450 |
| language | English |
| last_indexed | 2024-04-11T11:20:37Z |
| publishDate | 2022-09-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj.art-655de80fe56b4624bb15086ff781c1bd2022-12-22T04:27:03ZengElsevierBorsa Istanbul Review2214-84502022-09-01225839853Dividend policy and earnings management: Do agency problem and financing constraints matter?Ammar Hussain0Minhas Akbar1Department of Management Sciences, Government College University Faisalabad, Sahiwal Campus, Sahiwal 57000, PakistanDepartment of Management Sciences, COMSATS University Islamabad, (Sahiwal Campus), Sahiwal, 57000, Pakistan; Corresponding author.The present study aims to examine the relationship between dividend policy and earnings management by explicitly considering the role of the agency problem and financing constraints. The sample comprises 3250 non-financial Chinese listed firms from 2009 to 2018. This study uses fixed- and random effect models as econometric techniques. Dividend policy is measured with dividend yield, payout ratio, large and small dividend payment status. Earnings management is measured with discretionary accruals, which are used as a proxy of accrual-based earnings management. The salient findings of the study are as follows: (1) overall, dividend payments restrict managers' involvement in earnings management practices; (2) compared with small dividend-paying firms, larger dividend-paying firms have less involvement in earnings management practices; (3) the agency problem does not affect the nature of the proposed relationship; (4) the dividend payments of non-financially constrained firms dampen managers’ opportunistic behavior toward earnings management practices and vice versa.http://www.sciencedirect.com/science/article/pii/S2214845022000266G3L1M1 |
| spellingShingle | Ammar Hussain Minhas Akbar Dividend policy and earnings management: Do agency problem and financing constraints matter? Borsa Istanbul Review G3 L1 M1 |
| title | Dividend policy and earnings management: Do agency problem and financing constraints matter? |
| title_full | Dividend policy and earnings management: Do agency problem and financing constraints matter? |
| title_fullStr | Dividend policy and earnings management: Do agency problem and financing constraints matter? |
| title_full_unstemmed | Dividend policy and earnings management: Do agency problem and financing constraints matter? |
| title_short | Dividend policy and earnings management: Do agency problem and financing constraints matter? |
| title_sort | dividend policy and earnings management do agency problem and financing constraints matter |
| topic | G3 L1 M1 |
| url | http://www.sciencedirect.com/science/article/pii/S2214845022000266 |
| work_keys_str_mv | AT ammarhussain dividendpolicyandearningsmanagementdoagencyproblemandfinancingconstraintsmatter AT minhasakbar dividendpolicyandearningsmanagementdoagencyproblemandfinancingconstraintsmatter |