Showing papers by "Juha Kinnunen published in 1995"

Dividend-Based Earnings Management: Empirical Evidence From Finland

Abstract: In bank-dominated capital markets with blocked ownership firms are expected to pay out a smooth stream of dividends for the large institutional equity holders. This forces companies to report earnings high enough to pay out the dividends. On the other hand taxation may create an economic motive to report as low earnings as possible. Our empirical evidence gives support for the existence of dividend-based earnings management behavior in Finland. In particular we find that the reported earnings depend on the dividend-based target earnings even after controlling for the economic performance.