Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/11101
Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Does asymmetric information drive UK dividends propensity?
Authors: Basiddiq, Husam
Hussainey, Khaled
Contact Email: khaled.hussainey@stir.ac.uk
Keywords: Analysts following
Dividend propensity
Dividends
Information asymmetry
Information disclosure
United Kingdom
Issue Date: 2012
Publisher: Emerald
Citation: Basiddiq H & Hussainey K (2012) Does asymmetric information drive UK dividends propensity?, Journal of Applied Accounting Research, 13 (3), pp. 284-297.
Abstract: Purpose - This paper aims to extend and contribute to prior UK research on the association between information asymmetry and dividends propensity. It seeks to investigate the impact of the number of analysts following firms, a proxy for information asymmetry, on dividends propensity. Design/methodology/approach - Using a 282 UK FTSE-All Share non-financial/non-utilities firms with fiscal year ends on 2007, the paper uses a multiple regression model to investigate the association between dividends and analysts following. Findings - The paper finds that after controlling for firm-specific characteristics, there is a significant negative association between the number of analysts following firms and dividend propensity. The finding suggests that higher coverage of financial analysts for UK firms reduces levels of information asymmetry between managers and shareholders, which results in lower dividend propensity. These findings are consistent with agency theory and pecking order theory, but inconsistent with signalling theory. Originality/value - The paper contributes to prior research related to the drivers of dividend propensity by being the first UK study to examine the association between dividend propensity and information asymmetry.
Type: Journal Article
URI: http://hdl.handle.net/1893/11101
DOI Link: http://dx.doi.org/10.1108/09675421211281344
Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.
Affiliation: Salalah College of Technology
Accounting and Finance

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