Does earnings management influence dividend policies?: Empirical study based on different ownership contexts of Portuguese firms

• Autor(a) principal: Narciso, André Filipe Martins
• Data de Publicação: 2018
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/20692
• topic: Earnings management; Dividend; Dividend policy; Ownership; Gestão de resultados; Dividendos; Política de dividendos; Propriedade; Acionista -- Shareholder; Portugal -- 2013-2017

This study focuses on the way firms’ dividend policy is influenced by earnings management. The discretionary accruals methodology defended by Dechow et al. (1995), Kasznik (1999) and Kothari et al. (2005) is applied to measure earnings management. In order to add new lines of research on this matter, the study includes an in-depth analysis of the way both constructs relate to each other in different ownership contexts. The empirical study relies on an innovative set of 4,258 listed and non-listed Portuguese companies, representing a panel of around 20 thousand observations distributed over the period 2013-2017. The results demonstrate a positive statistically significant relationship between earnings management and dividend policy in the twelve methodologies considered. It is also predicted that the effect of earnings management on dividend policy is more pronounced in firms with a majority shareholder (more than 50% of share capital) as opposed to firms with non-concentrated ownership, and in firms with a majority corporate shareholder in contrast to companies with an individual/familiar ownership. In the case of the sample that faces taxpaying and nontaxpaying firms, the results about the effect of earnings management on dividend policy are relevant but present a contrary signal between each other. The divergence in terms of the relationship signal is surprising and may inspire future researches on this specific field.