Dividends and earnings quality: Evidence from China

Lu Deng, Sifei Li and Mingqing Liao

International Review of Economics & Finance, 2017, vol. 48, issue C, 255-268

Abstract: This paper investigates the association between dividend payouts and earnings quality for Chinese listed firms. The results show that dividend payouts are associated with more persistent earnings, higher accrual quality, and greater earnings informativeness, confirming the hypothesis on information content of dividends for Chinese firms. Further analyses show that the relationship between dividends and earnings could change with factors influencing the incentives to pay dividends. We find that the positive impact of dividend payouts on earnings quality is reduced for firms conducting equity refinancing. We also find evidence that the state ownership can reduce the information-conveying role of dividends.

Keywords: G32; G35; Dividends; Earnings quality; Equity refinancing; State ownership; China (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:48:y:2017:i:c:p:255-268

DOI: 10.1016/j.iref.2016.12.011

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