Earnings management and expected dividend increases around seasoned share issues: evidence from Finland
AbstractThis paper provides evidence that firms issuing new shares at higher discounts and hence with larger expected dividend increases, use their opportunities for earnings management in such a way that, by the year of a share issue, they report larger earnings in excess of current dividends than firms that issue shares at lower discounts or that do not issue shares at all. These excess earnings are useful to successful issuing firms in that they reinforce the buffer of retained earnings available for future dividend payments, thereby conveying credible information about the firm's ability to meet the expected dividend increase implied by the issue announcement. The empirical findings are consistent with this argument.
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Bibliographic InfoArticle provided by Elsevier in its journal Scandinavian Journal of Management.
Volume (Year): 16 (2000)
Issue (Month): 2 (June)
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Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/872/description#description
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- Jyrki Niskanen & Jukka Karjalainen & Mervi Niskanen & Jussi Karjalainen, 2011. "Auditor gender and corporate earnings management behavior in private Finnish firms," Managerial Auditing Journal, Emerald Group Publishing, vol. 26(9), pages 778-793, November.
- Diana Balaciu & Victoria Bogdan & Alina Beattrice Vladu, 2009. "A Brief Review Of Creative Accounting Literature And Its Consequences In Practice," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 16.
- Jyrki Niskanen & Matti Keloharju, 2000. "Earnings cosmetics in a tax-driven accounting environment: evidence from Finnish public firms," European Accounting Review, Taylor and Francis Journals, vol. 9(3), pages 443-452.
- Chen, Chao & Chen, Xiao, 2007. "The information content of rights offerings in China," Research in International Business and Finance, Elsevier, vol. 21(3), pages 414-427, September.
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