Financial transparency and dividend policy: The moderating effect of analyst coverage

Yifan Peng and Wenchang Li

Finance Research Letters, 2025, vol. 79, issue C

Abstract: In this paper, we explore how financial transparency affects a firm's dividend policy, a strategy reflecting the balance between reinvestment and distribution of profits to shareholders. Exploiting a research sample of all A-share listed companies in China, we discover compelling evidence that a company's financial transparency is positively correlated with the amount of dividends. The positive effect is more evident for enterprises with less analyst coverage. We further demonstrate that operating efficiency and financing cost are plausible economic channels. Our findings still hold after addressing endogeneity problems. Overall, this study sheds light on the implications of financial transparency.

Keywords: Financial transparency; Performance; Dividend policy (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612325005331
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325005331

DOI: 10.1016/j.frl.2025.107270

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().