Earnings and dividend informativeness when cash flow rights are separated from voting rights

Journal Article (Journal Article)

We contrast the informativeness of earnings and dividends for firms with dual class and single class ownership structures. Results of both across-sample tests (which explicitly control for factors influencing ownership structure and informativeness) and within-sample tests (which implicitly control for factors associated with ownership structure) show that earnings are generally less informative, and dividends are at least as (if not more) informative, for dual class firms. We interpret these results as suggesting that the net effect of dual class structures is to reduce the credibility of earnings and to enhance the salience of dividends as measures of performance. © 2005 Elsevier B.V. All rights reserved.

Full Text

Duke Authors

Cited Authors

  • Francis, J; Schipper, K; Vincent, L

Published Date

  • June 1, 2005

Published In

Volume / Issue

  • 39 / 2

Start / End Page

  • 329 - 360

International Standard Serial Number (ISSN)

  • 0165-4101

Digital Object Identifier (DOI)

  • 10.1016/j.jacceco.2005.01.001

Citation Source

  • Scopus