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What Do Dividends Tell Us About Earnings Quality?

Review of Accounting Studies, 16, no. 1 (March 2011).
2009
  • 25
    Citations
  • 15,382
    Usage
  • 17
    Captures
  • 1
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    25
    • Citation Indexes
      25
  • Usage
    15,382
    • Abstract Views
      12,280
    • Downloads
      3,102
  • Captures
    17
    • Readers
      15
      • SSRN
        15
    • Exports-Saves
      2
      • SSRN
        2
  • Mentions
    1
    • Blog Mentions
      1
      • Blog
        1
  • Ratings
    • Download Rank
      8,116

Paper Description

Over the past 30 years, there have been significant changes in the distribution of earnings — cross-sectional variation has increased, with increasing left skewness—as well as in corporate payout policy, with many fewer firms paying dividends and the emergence of stock repurchases. We investigate whether the informativeness of payout policy with respect to earnings quality changes over this period. We find that the reported earnings of dividend-paying firms are more persistent than those of other firms and that this relation is remarkably stable over time. We also find that dividend payers are less likely to report losses and those losses that they do report tend to be transitory losses driven by special items. These results do not hold as strongly for stock repurchases, consistent with them representing less of a commitment than dividends.

Bibliographic Details

Douglas J. Skinner; Eugene F. Soltes

Dividends; Earnings Quality; Payout policy; Stock repurchases

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