THE RESEARCH ON THE RELATIONSHIP AMONG DIVIDEND CHANGES, EARNINGS AND CASH FLOW

• Main Authors: Szu-Wen Lien, 連思雯
• Other Authors: Ruey-Shii Chen
• Format: Others
• Language: en_US
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/t5su5r

碩士 === 大同大學 === 事業經營學系(所) === 95 === The capital market environment and dividend regulation in Taiwan are different from other countries. This research wants to investigate the flexibility of dividend policy in Taiwan and its influencing factors. Earnings management is one of the possible behaviors for managers to pursue their own interest. It makes the earnings reported on financial statements distorted. In addition to reported earnings, this study especially uses cash flow and unmanaged earnings to examine the influencing factors of the dividend changes. We examine whether the decision to increase, maintain or reduce dividends depends on past earnings (or cash flow or unmanaged earnings). We find some evidences to support our hypothesis and the explanation power of unmanaged earnings is larger than reported earnings. We also investigate whether Taiwanese firms are more reluctant to omit and cut dividends and whether continuous earnings losses are a key factor for dividend omissions. Most of the estimated results are consistent with our expectations. Empirical evidence shows there is a substitute relation between stock dividend and cash dividend.