How does dividend smoothing relate to investment efficiency?

• Main Authors: Chen, Hsiao-Hsuan, 陳曉萱
• Other Authors: Lin, Jui-Chia
• Format: Others
• Language: en_US
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/336d54

碩士 === 國立交通大學 === 財務金融研究所 === 105 === In this study, we examine whether dividend smoothing can improve investment efficiency. We find that dividend smoothing play a mitigating role in information asymmetry and agency problem, and lead to an improvement on investment efficiency. Our findings show that dividend smoothing is positively (negatively) associated with investment among firms with higher likelihood of under-investment (over-investment). Meanwhile, this paper develops a new methodology to measure for dividend smoothing on firm-year level which is useful in empirical researches of dividend smoothing.