Corporate risk management and dividend signaling theory

Dionne, Georges; Ouederni, Karima

doi:10.1016/j.frl.2011.05.002

Cited by 25 publications

(14 citation statements)

References 17 publications

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“…The organization's strategic decisions send signals to the market about commitment and initiatives that affect reputation and relationship with other organizations and stakeholders [34,35,40]. Moreover, positive signals increase firm value and performance, whereas negative signals reduce stock price and product demand [41,42]. Therefore, organizational performances are closely associated with quality of signals, which determines signaling cost (opportunity cost).…”

Section: The Signaling Theorymentioning

confidence: 99%

“…Furthermore, key resourceful people on the firm's board send signals to the market about a changing competitive management strategy. Positive financial performance signals firms' financial stability resulting in a share price increase [35,36,42]. Furthermore, new shares issuance sends negative signals to the market because it reduces existing shareholders' benefits and confidence in management [35,40].…”

Section: The Signaling Theorymentioning

confidence: 99%

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A Cross-Country Investigation of Corporate Governance and Corporate Sustainability Disclosure: A Signaling Theory Perspective

2018

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There is a dearth of research on corporate governance and total sustainability disclosure (economic, environmental, and social) in developing, particularly South Asian, countries. This is unique cross-country research on South Asian countries’ corporate governance elements and total sustainability disclosure practices. The study considers a set of insightful theories, namely, the signaling and agency theories of understanding the motives and drivers of sustainability reporting. Based on data from the Global Reporting Initiative database, the study analyzes Bangladesh, India, and Pakistan. We have collected annual report and sustainability reports from the GRI database for the period between 2009 and 2016. Based on the signaling and agency theories, the study investigates how board and shareholding structures convey signals to the market and different stakeholders. Our empirical results find that total sustainability disclosure has a positive and significant relationship with foreign shareholding, institutional shareholding, board independence, and board size. On the other hand, we document that director shareholding is negatively but significantly associated with total sustainability disclosure. Therefore, we conclude that corporate governance elements have very strong influential power to send positive signals to the market that lead to reduced information asymmetry and ensuring honest signals from different stakeholders.

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Section: The Signaling Theorymentioning

confidence: 99%

Section: The Signaling Theorymentioning

confidence: 99%

A Cross-Country Investigation of Corporate Governance and Corporate Sustainability Disclosure: A Signaling Theory Perspective

2018

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“…Signaling theory has been used in many studies, especially those related to corporate finance 11,12 and human behavior 13,14 . Various kinds of analyses explain that <IR> and its credibility will give the signal that the organization is taking steps to meet the information expectations of various stakeholder groups.…”

Section: Literature Review and Hypothesis Development Signaling Theorymentioning

confidence: 99%

Does Integrated Reporting Approach Enhance the Value Relevance of Accounting Information?: Evidence from Asian Firms

Fernando¹,

Dharmawati²,

Sriani³

et al. 2018

Proceedings of the 6th International Accounting Conference (IAC 2017)

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This study aims to investigate the effect of Integrated Reporting () on the relevance of accounting information: evidence from ASIA. By conducting regression analysis on 195 firm-years from listed companies on The International Integrated Reporting Council between 3 years. is measured by coverage ration of keywords using NVIVO Software Version 11. The results shows that impelementation of has no effect on the relevance of accounting information.

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“…For example, dividends have been found to serve as an effective way of signaling a firm’s bright future performance (Dionne and Ouederni, 2011; Lin et al , 2017). By spending cash on dividends in the present, managers can show their confidence that firms’ future profitability will generate consistently strong cash flows.…”

Section: Related Literature and Hypothesesmentioning

confidence: 99%

Dividend and investment decisions in asymmetric information environments: evidence from the restaurant industry

Gim

Jang²

2022

IJCHM

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Purpose This study aims to examine how information asymmetry, which refers to an information gap between a firm’s management and its investors regarding the firm’s true value, influences firms’ dividend and investment decisions in the restaurant industry. This study also investigated the moderating role of a firm’s level of franchising in the relationship between information asymmetry and these behaviors of restaurant firms. Design/methodology/approach This study used generalized method of moments panel regression analyses. Principal component analysis was also used to create a composite index of information symmetry. Findings This study demonstrated that in asymmetric information environments, restaurant managers tend to reduce dividend payments. In addition, this study showed that information asymmetry leads to restaurant managers’ investment inefficiency. However, the investment inefficiency of the restaurant industry was found to decrease as restaurant firms’ level of franchising increases. Practical implications Firms’ dividends and investment decisions are of great interest to investors because these decisions heavily influence investors’ wealth-maximization goals. By shedding light on the previously unrecognized determinants of dividend and investment behaviors in the restaurant industry, this study helps individual investors to make informed investing decisions. Originality/value Conflicting arguments can be made regarding the impact of asymmetric information environments on the dividend and investment behaviors of restaurant firms. This study aimed to verify these as-yet unclear relationships in the restaurant industry.

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Corporate risk management and dividend signaling theory

Cited by 25 publications

References 17 publications

A Cross-Country Investigation of Corporate Governance and Corporate Sustainability Disclosure: A Signaling Theory Perspective

A Cross-Country Investigation of Corporate Governance and Corporate Sustainability Disclosure: A Signaling Theory Perspective

Does Integrated Reporting Approach Enhance the Value Relevance of Accounting Information?: Evidence from Asian Firms

Dividend and investment decisions in asymmetric information environments: evidence from the restaurant industry

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