Earnings Management And Dividends: Evidence From Emerging Countries

Abstract

This research examines the relationship between earnings management and dividens in emerging countries. Recognizing that the financial behavior of firms within these markets could divulge unique insights into corporate governance, this study explores the relationship between managerial accounting practices and the consequent implications for dividend distribution. Despite the rapid growth and increased market participation within emerging economies, research on their corporate finance strategies remains relatively underexplored. The findings reveal a significant and negative relationship between earnings management and dividens in emergings countries. To appeal to investors, firms have acquiesced in earnings management, subsequently adapting their dividend policies to align with managerial objectives. Furthermore, the study examine whether and how earnings management - a practice characterized by deliberate alterations of financial statements to meet specific targets or influence stakeholders' perceptions. The study scrutinizes the patterns, motivations, and consequences of these financial strategies, chiefly in how they might affect firm performance and economic value from both a firm-level and stakeholder perspective. Overall, The findings are expected to contribute to the scholarly discourse on corporate finance by providing empirical evidence on the repercussions of financial decisions in less scrutinized markets. Moreover, they hold policy implications for regulators and investors interested in enhancing transparency and efficiency within the financial ecosystems of emerging countries