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The moderating effect of private information on the relation between financial reporting quality and corporate dividend efficiency

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  • Yasuharu Aoki
  • Takuma Kochiyama

Abstract

We examine the effect of private information on the linkage between financial reporting quality and dividends. While prior studies show that better reporting quality mitigates agency problems regarding dividends, this effect can depend on capital suppliers' private information sources. In a sample of Japanese firms, we measure dividend efficiency regarding over‐ and underpayments and use unique main bank relationships as a proxy for private information. Reporting quality enhances dividend efficiency, and this linkage is observed only for firms without main bank relationships. The results suggest that high‐quality reporting streamlines dividends, particularly when capital suppliers do not have private information sources.

Suggested Citation

  • Yasuharu Aoki & Takuma Kochiyama, 2025. "The moderating effect of private information on the relation between financial reporting quality and corporate dividend efficiency," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(1), pages 457-486, March.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:1:p:457-486
    DOI: 10.1111/acfi.13336
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