Dividend policy and earnings quality in Vietnam
Purpose – The purpose of this paper is to examine the relationship between dividend policy and earnings quality of Vietnamese listed firms. Design/methodology/approach – The sample includes firms listed on Vietnam stock exchange during the period between 2010 and 2016. Two measures of earnings quali...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2019-10-01
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| Series: | Journal of Asian Business and Economic Studies |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/JABES-07-2018-0047/full/pdf?title=dividend-policy-and-earnings-quality-in-vietnam |
| _version_ | 1798036189576429568 |
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| author | Trang Thi Ngoc Nguyen Phuong Kim Bui |
| author_facet | Trang Thi Ngoc Nguyen Phuong Kim Bui |
| author_sort | Trang Thi Ngoc Nguyen |
| collection | DOAJ |
| description | Purpose – The purpose of this paper is to examine the relationship between dividend policy and earnings quality of Vietnamese listed firms. Design/methodology/approach – The sample includes firms listed on Vietnam stock exchange during the period between 2010 and 2016. Two measures of earnings quality are the annual firm-specific absolute value of residuals from Dechow and Dichev’s (2002) model and from Dechow and Dichev (2002) as modified by McNichols’s (2002) model. The firms’ dividend policy is captured by dividend paying status. This is a dummy variable that takes the value of 1 if the firm pays dividends and 0 otherwise. In addition, dividend yield and dividend payout ratio, which are continuous variables, are also used in this paper as alternative proxies for dividend policy. Findings – Using panel data analysis, this paper documents that dividend payers have higher earnings quality than dividend non-payers. Dividends are an indicator of earnings quality. These findings are consistent with prior studies. After controlling for variables that may be related to earnings quality as well as for the year and industry fixed effects, this relation remains unchanged. In addition, this result is also robust after controlling for firm fixed effects. Originality/value – This paper offers the empirical evidence on the relation between dividend policy and earnings quality in Vietnam, which is a frontier market. |
| first_indexed | 2024-04-11T21:09:01Z |
| format | Article |
| id | doaj.art-b50d073b8caf4adcb29b0fca923a36ba |
| institution | Directory Open Access Journal |
| issn | 2515-964X |
| language | English |
| last_indexed | 2024-04-11T21:09:01Z |
| publishDate | 2019-10-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Journal of Asian Business and Economic Studies |
| spelling | doaj.art-b50d073b8caf4adcb29b0fca923a36ba2022-12-22T04:03:08ZengEmerald PublishingJournal of Asian Business and Economic Studies2515-964X2019-10-0126230131210.1108/JABES-07-2018-0047632816Dividend policy and earnings quality in VietnamTrang Thi Ngoc Nguyen0Phuong Kim Bui1School of Finance, University of Economics Ho Chi Minh City, Ho Chi Minh City, VietnamSchool of Finance and Accounting, Van Lang University, Ho Chi Minh City, VietnamPurpose – The purpose of this paper is to examine the relationship between dividend policy and earnings quality of Vietnamese listed firms. Design/methodology/approach – The sample includes firms listed on Vietnam stock exchange during the period between 2010 and 2016. Two measures of earnings quality are the annual firm-specific absolute value of residuals from Dechow and Dichev’s (2002) model and from Dechow and Dichev (2002) as modified by McNichols’s (2002) model. The firms’ dividend policy is captured by dividend paying status. This is a dummy variable that takes the value of 1 if the firm pays dividends and 0 otherwise. In addition, dividend yield and dividend payout ratio, which are continuous variables, are also used in this paper as alternative proxies for dividend policy. Findings – Using panel data analysis, this paper documents that dividend payers have higher earnings quality than dividend non-payers. Dividends are an indicator of earnings quality. These findings are consistent with prior studies. After controlling for variables that may be related to earnings quality as well as for the year and industry fixed effects, this relation remains unchanged. In addition, this result is also robust after controlling for firm fixed effects. Originality/value – This paper offers the empirical evidence on the relation between dividend policy and earnings quality in Vietnam, which is a frontier market.https://www.emerald.com/insight/content/doi/10.1108/JABES-07-2018-0047/full/pdf?title=dividend-policy-and-earnings-quality-in-vietnamearnings managementvietnamearnings qualitydividend policyfrontier market |
| spellingShingle | Trang Thi Ngoc Nguyen Phuong Kim Bui Dividend policy and earnings quality in Vietnam Journal of Asian Business and Economic Studies earnings management vietnam earnings quality dividend policy frontier market |
| title | Dividend policy and earnings quality in Vietnam |
| title_full | Dividend policy and earnings quality in Vietnam |
| title_fullStr | Dividend policy and earnings quality in Vietnam |
| title_full_unstemmed | Dividend policy and earnings quality in Vietnam |
| title_short | Dividend policy and earnings quality in Vietnam |
| title_sort | dividend policy and earnings quality in vietnam |
| topic | earnings management vietnam earnings quality dividend policy frontier market |
| url | https://www.emerald.com/insight/content/doi/10.1108/JABES-07-2018-0047/full/pdf?title=dividend-policy-and-earnings-quality-in-vietnam |
| work_keys_str_mv | AT trangthingocnguyen dividendpolicyandearningsqualityinvietnam AT phuongkimbui dividendpolicyandearningsqualityinvietnam |