The Effect of Earnings Persistence on Dividend Policy

• Main Authors: HSU, YU-LIN, 許郁琳
• Other Authors: CHAN, CHIA-CHUNG
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/25kkkj

碩士 === 東海大學 === 財務金融學系 === 106 === Using the sample consisting of listed and OTC companies in Taiwan from 1990 to 2017, this thesis investigates the relationship between earnings persistence and the company’s dividend policy, and examines whether earnings persistence has a great influence on company’s dividend policy under the theory of residual dividend policy. In addition, we study how the company's dividend payout ratio changes under different ownership structures. Finally, we augment our model to include four potentially important variables that could affect the dividend policy to test whether earnings persistence can maintain its explanatory power over company’s dividend payout ratio. The empirical results show that there is a positive relationship between earnings persistence and the company's dividend policy, and confirm that earnings persistence still has significant influence under the framework of the theory of residual dividend policy. In addition, earnings persistence increases the company’s dividend payout ratio for a state-controlled company, but decreases it for a family-controlled company. Finally, with additional four important variables (capital expenditure, liquidity, risk, and company age) added to the dividend payout model, we find that earnings persistence still has strong impacts on dividend policy.