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International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

Earning Management and Dividend Policy: Evidence from Pakistani Textile Industry

Aurangzeb , Tasfoura Dilawer

Open access

The aim of this research is to analyze the impact of earning management on dividend payout policy. This research is conducted by taking the data of textile industry from the year of 1966 to 2008. All the companies listed with Karachi Stock Exchange (KSE) are used as sample. Measurement of dividend policy is done by calculating dividend payout ratio. The dividend payout (DPO) is taken as a dependent variable and the earning management (EM) is taken as an independent variable, discretionary accruals are taken as proxy of earning management and three variables are treated as control variables; return on equity (ROE), size of the firm (SF) and self finance ratio (SFR). Results explored earning management and all control variables have negative relation with dividend payout policy.

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