The Role of Earnings Quality in Adopting a Persistent Dividend Policy: The System Generalized Method of Moments | ||
| مطالعات تجربی حسابداری مالی | ||
| Volume 17, Issue 67, October 2020, Pages 153-175 PDF (4.64 M) | ||
| Document Type: Research Paper | ||
| DOI: 10.22054/qjma.2020.38991.1943 | ||
| Authors | ||
| Abbas Aflatooni* 1; Zahra Nikbakht2 | ||
| 1Assistant professoe , Accounting Department, Bu-Ali sina university, Hamadan.Iran | ||
| 2َAssistant Professor,Department of Accounting, Payame Noor University, ,,Tehran,IRAN | ||
| Abstract | ||
| One of the firms’ tools to provide a low-risk image is adopting a persistent dividend policy. However, it should be noted that due to financial constraints, many firms are unable to implement this policy in the long run. This research investigates the role of earnings quality in adopting a persistent dividend policy in 148 firms listed in Tehran Stock Exchange (TSE) (includes 1628 observations) during 2007-2017. To measure earnings quality, I use five proxies and to investigate their role in adopting a persistent dividend policy, I employ partial adjustment model and dividends adjustment speed concept. To estimate the models, I apply the Generalized Method of Moments (GMM) with system estimator. The research results show that compared with other firms, firms with lower total accruals, lower discretionary accruals, higher accruals quality, smoother earnings and higher overall earnings quality, are more able to conduct a persistent dividends policy. The research results using differenced-GMM estimator confirm the research primary results. These findings are consistent with the predictions of the signaling theory | ||
| Keywords | ||
| Earnings Quality; Dividends; Generalized Method of Moments; System Estimator; Difference Estimator | ||
| References | ||
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