Managing Earnings V/S Strategizing Dividends: Sectoral Evidence from Pakistan Stock Exchange
DOI:
https://doi.org/10.19166/derema.v13i2.1049Ключевые слова:
price to book, debt to equity, earning per shareАннотация
This paper means to inspect the regression between the Price to Book ratio as a proxy for earning management and payout proportion as a proxy to dividend policy. This paper utilizes multivariate analysis to examine the relationship between the price to book ratio and dividend policy. Using 11 years’ annual data from 2006-2016, this paper delivers new confirmation demonstrating that timely payment of dividend has a positive impact on the reputation of the company in the market. Dividend payment boosts up investors’ confidence to invest in the company. This study helps the corporate superintendents and stock financial experts to focus on the relationship of the dividend. No past review has handled the issue of the contingent relationship between the price to book ratio and payout proportion in Pakistani Industry and specifically on cement, food and oil and gas sectors.
Abstrak dalam Bahasa Indonesia : Tulisan ini bermaksud untuk meneliti regresi antara Price to Book Ratio sebagai proksi untuk manajemen penghasilan dan proporsi pembayaran sebagai proksi untuk kebijakan dividen.Penelitian ini menggunakan analisis multivariat untuk menguji hubungan antara Price to Book Ratio dan kebijakan dividen. Dengan menggunakan data tahunan selama 11 tahun dari 2006-2016, artikel ini memunculkan suatu konfirmasi yang menunjukkan bahwa pembayaran dividen tepat waktu memiliki dampak positif pada reputasi perusahaan di pasar. Pembayaran dividen meningkatkan kepercayaan investor untuk berinvestasi di perusahaan. Studi ini membantu pengawas perusahaan dan ahli keuangan saham untuk fokus pada hubungan dividen. Belum ada penelitian sebelumnya yang menangani masalah hubungan kontingen antara Price to Book Ratio dan proporsi pembayaran dalam Industri di Pakistan dan khususnya pada sektor semen, pangan dan minyak dan gas.
Библиографические ссылки
Adelegan, O. J. (2003). An empirical analysis of the relationship between cash flow and dividend changes in Nigeria. African Development Review, 15(1), 35-49. https://doi.org/10.1111/1467-8268.00061
Afzal, T., & Mirza, H. H. (2010). Ownership structure and cash flow as determinants of corporate dividend policy in Pakistan. International Business Research, 3(3), 210-221. https://doi.org/10.5539/ibr.v3n3p210
Aharony, J., Lin, C., & Loeb, M. (1993). Initial public offerings, accounting choices, and earnings management. Contemporary Accounting Research, 10(1), 61-81. https://doi.org/10.1111/j.1911-3846.1993.tb00382.x
Ahmed, F., Advani, N., & Kanwal, S. (2018). Earnings management and dividend policy: Empirical evidence from major sectors of Pakistan. International Journal of Economics and Financial Issues, 8(3), 182-190.
Ahmed, H., & Javid, A. Y. (2008). Dynamics and determinants of dividend policy in Pakistan (evidence from Karachi stock exchange non-financial listed firms). Retrieved from https://mpra.ub.uni-muenchen.de/id/eprint/37342
Ali, U., Noor, M. A., Khurshid, M. K., & Mahmood, A. (2015). Impact of firm size on earnings management: A study of textile sector of Pakistan. European Journal of Business and Management, 7(28), 47-56. https://doi.org/10.2139/ssrn.2698317
Aurangzeb, D., & Dilawer, T. (2012). Earnings management and dividend policy: evidence from Pakistani textile industry. International Journal of Academic Research in Business and Social Sciences, 2(10), 362-372.
Ayub, M. (2005). Corporate governance and dividend policy. Pakistan Economic and Social Review, 43(1), 115-128.
Bhattacharya, S. (1979). An exploration of nondissipative dividend-signaling structures. Journal of Financial and Quantitative Analysis, 14(4), 667-668. https://doi.org/10.2307/2330441
Bushman, R., Dutta, S., Hughes, J., & Indejejikian, R. (1993). Strategic behavior of differentially informed traders around public announcements. Unpublished working paper, University of Minnesota.
Charitou, A., & Vafeas, N. (1998). The association between operating cash flows and dividend changes: an empirical investigation. Journal of Business Finance & Accounting, 25(1”2), 225-249. https://doi.org/10.1111/1468-5957.00185
Farinha, J., & Moreira, J. A. (2007). Dividend and earnings quality: The missing link? Retrieved from https://www.fep.up.pt/investigacao/cempre/actividades/sem_fin/sem_fin_01_05/PAPERS_PDF/paper_sem_fin_10jan08.pdf
Gorganlidavaji, J., & Vakilifard, H. (2014). The effect of firm size and growth opportunity on accounting discretion and its relationship with future stock return (management opportunism test). European Online Journal of Natural and Social Sciences, 3(3), 511-521. Retrieved from http://european-science.com/eojnss/article/viewFile/573/pdf
Goshen, Z. (1995). Shareholder dividend options. The Yale Law Journal, 104(4), 881-932. https://doi.org/10.2307/797108
Hosseinian, M., & Ramzani, J. (2016). Investigate the relationship between earnings management and profitability the firms Listed in the Tehran Stock Exchange. Journal of Productivity and Development, 2(4), 86-95.
Imran, K. (2011). Determinants of dividend policy: A case of Pakistan engineering sector. Romanian Economic Journal, 14(41), 47-60. Retrieved from https://EconPapers.repec.org/RePEc:rej:journl:v:14:y:2011:i:41:p:47-60
Jones, J. J. (1991). Earnings management during import relief investigations. Journal of Accounting Research, 29(2), 193-228. https://doi.org/10.2307/2491047
Jensen C. M. (1986). Agency costs of free cash flow, corporate finance, and takeovers, The American Economic Review, 76, 323-329. https://doi.org/10.2139/ssrn.99580
Jensen, M., & Mackling, W. H. (1976). Theory of the firm: Managerial behavior, agency cost and ownership structure. Journal of Financial Economics (JFE), 3(4). http://dx.doi.org/10.2139/ssrn.94043
Jensen, M. C., & Murphy, K. J. (1990). Performance pay and top-management incentives. Journal of Political Economy, 98(2), 225-264. https://doi.org/10.1086/261677
Kazemi, H., Rostami, V., & Ghorbani, B. (2014). Earnings management and dividend policy among listed companies in Tehran Stock Exchange. Asian Research Journal of Banking and Finance, 4(4), 206-219.
Khurana, I. K., Martin, X., & Pereira, R. (2006). Financial development and the cash flow sensitivity of cash. Journal of Financial and Quantitative Analysis, 41(4), 787-808. https://doi.org/10.1017/S0022109000002647
La Porta, R., Lopez”de”Silanes, F., Shleifer, A., & Vishny, R. W. (2000). Agency problems and dividend policies around the world. The Journal of Finance, 55(1), 1-33. https://doi.org/10.1017/s0022109000002647
Lev, B. (1989). On the usefulness of earnings and earnings research: Lessons and directions from two decades of empirical research. Journal of Accounting Research, 27, 153-192. https://doi.org/10.2307/2491070
M’rabet R., & W. Boujjat. (2016). The relationship between dividend payments and firm performance: A study of listed companies in Morocco. European Scientific Journal, ESJ, 12(4). https://doi.org/10.19044/esj.2016.v12n4p469
McKee, T. E. (2005). Earnings management: an executive perspective. Australia: South-Western Pub.
Miller, M. & Kevin (1985). Dividend policy under asymmetric information. Journal of Finance, 40(4), 1031-1051. https://doi.org/10.1111/j.1540-6261.1985.tb02362.x
Miller, M., & Modigliani (1961). Dividend policy, growth and the valuation of shares. Journal of Business, 34(4), 411-433. https://doi.org/10.1086/294442
Moghri, A. E., & Galogah, S. S. (2013). Effect of earnings management on dividend policy: evidence from Tehran Stock Exchange. World of Sciences Journal, 1(14), 58-65.
Osamwonyi, I. O., & Lola-Ebueku, I. (2016). Does dividend policy affect firm earnings? Empirical evidence from Nigeria. International Journal of Financial Research, 7(5), 77. https://doi.org/10.5430/ijfr.v7n5p77
Savov, S. (2006). Earnings management investment, and dividend payments. Working paper University of Mannheim, Germany. https://doi.org/10.2139/ssrn.917680
Shah, S. Z. A., Yuan, H., & Zafar, N. (2010). Earnings management and dividend policy: An empirical comparison between Pakistani listed companies and Chinese listed companies. International Research Journal of Finance and Economics, 35(1), 51-60.
Sloan, R. G. (1993). Accounting earnings and top executive compensation. Journal of accounting and Economics, 16(1-3), 55-100. https://doi.org/10.1016/0165-4101(93)90005-Z
Sloan, R. G. (2001). Financial accounting and corporate governance: A discussion. Journal of accounting and economics, 32(1-3), 335-347. https://doi.org/10.1016/S0165-4101(01)00039-8
Загрузки
Опубликован
Выпуск
Раздел
Лицензия
Authors who publish with this journal agree to the following terms:
1) Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (CC-BY-SA 4.0) that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
2) Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
3) Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website). The final published PDF should be used and bibliographic details that credit the publication in this journal should be included.
