Who Smoothes Dividends?

29 Pages Posted: 4 Feb 2008 Last revised: 20 Jun 2011

See all articles by Laurence David Booth

Laurence David Booth

University of Toronto - Rotman School of Management

Zhaoxia Xu

UNSW Australia Business School, School of Banking and Finance

Abstract

This paper examines the relation between dividend smoothing and asymmetric information between managers and investors. We find that the extent of dividend smoothing are negatively related to the measures of information asymmetry. Firms with higher levels of asymmetric information have a higher propensity to smooth their dividends. These results imply that a firm's information environment affects its dividend smoothing decision.

Keywords: Dividend smoothing, information asymmetry

JEL Classification: G35

Suggested Citation

Booth, Laurence David and Xu, Zhaoxia, Who Smoothes Dividends?. Second Singapore International Conference on Finance 2008, NYU Poly Research Paper, Available at SSRN: https://ssrn.com/abstract=1089587 or http://dx.doi.org/10.2139/ssrn.1089587

Laurence David Booth

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Zhaoxia Xu (Contact Author)

UNSW Australia Business School, School of Banking and Finance ( email )

Sydney, NSW 2052
Australia

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