Please use this identifier to cite or link to this item:
Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Does asymmetric information drive UK dividends propensity?
Author(s): Basiddiq, Husam
Hussainey, Khaled
Contact Email:
Keywords: Analysts following
Dividend propensity
Information asymmetry
Information disclosure
United Kingdom
Issue Date: 2012
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.
DOI Link:
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.

Files in This Item:
File Description SizeFormat 
Does Asymmetric Information Drive UK Dividends propensity.pdf106.07 kBAdobe PDFUnder Permanent Embargo    Request a copy

Note: If any of the files in this item are currently embargoed, you can request a copy directly from the author by clicking the padlock icon above. However, this facility is dependent on the depositor still being contactable at their original email address.

This item is protected by original copyright

Items in the Repository are protected by copyright, with all rights reserved, unless otherwise indicated.

If you believe that any material held in STORRE infringes copyright, please contact providing details and we will remove the Work from public display in STORRE and investigate your claim.