Dividend Policy and Informativeness of Reported Earnings: Evidence from the MENA Region

Authors

Omar Farooq, The American University in Cairo (AUC)Follow
Nermeen Fathy Ahmed Shehata, The American University in Cairo (AUC)Follow

Author's Department

Management Department

Second Author's Department

Accounting Department

Find in your Library

https://onlinelibrary.wiley.com/doi/epdf/10.1111/irfi.12124

All Authors

Omar Farooq; Nermeen Shehata; Siva Nathan

Document Type

Research Article

Publication Title

International Review of Finance

Publication Date

3-31-2018

doi

10.1111/irfi.12124

Abstract

This paper documents that informativeness of reported earnings, measured by earnings–return relation, is an increasing function of dividend payout ratio in the Middle East and North Africa region during the period between 2003 and 2014. We argue that higher dividends reduce agency conflicts. Lower agency problems lead firms to disclose information more truthfully, thereby improving credibility of reported earnings. We also show that our results hold for various proxies of dividend policy.

First Page

113

Last Page

121

Recommended Citation

APA Citation

Farooq, O. & Shehata, N. F. (2018). Dividend Policy and Informativeness of Reported Earnings: Evidence from the MENA Region. International Review of Finance, 18(1), 113–121. 10.1111/irfi.12124
https://fount.aucegypt.edu/faculty_journal_articles/173

MLA Citation

Farooq, Omar, et al. "Dividend Policy and Informativeness of Reported Earnings: Evidence from the MENA Region." International Review of Finance, vol. 18,no. 1, 2018, pp. 113–121.
https://fount.aucegypt.edu/faculty_journal_articles/173