Dividend Reporting Information Content Based on the Failure of Long-Term and Short-Term Trend Incremental and Decreasing Company performance Criteria

Document Type : Original Article

Authors

Associate professor of accounting, Shahid Cahmran University of Ahvaz

Abstract

The aim of this study is to examine the dividend reporting information content in relation with future performance based on long-term and short-run incremental and decreasing trends of corporate performance Criteria (including earnings per share, operating profit per share, operating cash flow of each share and the growth of per share net assets adjusted in terms of inflation). For this purpose, four main hypotheses and sixteen sub-hypotheses are developed and data on 301 companies listed in Tehran Stock Exchange for the period of 1992 to 2015 were analyzed. The regression models using Panel data method with fixed effects approach reviewed and tested. The results of the research showed that for all performance criteria with the exception of functional criterion for the net asset value changes for each share (performance balance criterion), dividend information content in relation to future corporate performance is higher for long-term patterns than short-term patterns. So it can be argued that the information content of the future performance is higher for stable companies in terms of performance and distribution in terms of dividend, compared to less stable firms. Also, the results indicate that the amount of profit in each of performance criteria with the exception of the functional criterion for net asset value changes for each share (performance balance sheet), has a greater effect on decreasing and increasing dividends for long-term patterns than short-term patterns
 
 

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History

  • Receive Date: 17 October 2017
  • Revise Date: 09 June 2018
  • Accept Date: 19 February 2018

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