Asymmetric Information and Dividend Policy

"We examine how informational asymmetries affect firms' dividend policies. We find that firms that are more subject to information asymmetry are less likely to pay, initiate, or increase dividends, and disburse smaller amounts. We show that our main results are not driven by our sample and that our results persist after accounting for the changing composition of payout over the sample period, the increasing importance of institutional shareholdings, and catering incentives. We conclude that there is a negative relation between asymmetric information and dividend policy. Our results do not support the signaling theory of dividends." Copyright (c) 2008 Financial Management Association International..

Corporate life cycle and cost of equity capital.

This paper investigates the effect of the corporate life cycle on the cost of equity capital. Using a sample of Australian firms between 1990 and 2012, we find that the cost of equity capital varies over the life cycle of the firm. In particular, using Dickinson’s (2011) life cycle measure, we find that the cost of equity is higher in the introduction and decline stages and lower in the growth and mature stages, resembling a U-shaped pattern. When DeAngelo, DeAngelo, and Stulz’s (2006) life cycle measure – earned/contributed capital mix (RE/TA) – is used, we find that the cost of equity decreases as retained earnings as a proportion of total asset increases after controlling for other firm characteristics and unobserved heterogeneity. These findings are shown to be robust using a series of sensitivity tests

Corporate life cycle research in accounting, finance and corporate governance: A survey, and directions for future research

Corporate life cycle has received considerable interest in the accounting, finance and corporate governance literature. We synthesize this literature to inform readers about the valuable insights gained from these studies, and to outline knowledge gaps and future research directions. Although papers studying the determinants of corporate life cycles are few in number, our review suggests that managerial efficiencies, flexibility, and the resource-base of the firm drive the transition through the corporate life cycle. The bulk of the reviewed papers examine the implications of firm life cycle studies, and we categorize these into three groups: (i) financial reporting and management accounting implications, (ii) financial policy implications, and (iii) corporate governance implications. Our review suggests that the corporate life cycle has considerable effects on firms’ financial reporting and corporate disclosures, corporate investment, financing and dividends decisions; and on corporate governance and socially responsible behavior. In surveying the growing body of literature on the corporate life cycle, we identify critical short-comings of past studies, and offer suggestions for future studies

Singapore 1994-1996: Bibliographies

10.1177/002200949803300306The Journal of Commonwealth Literature333134-15