Evidence on Irish financial directors' views about dividends
Qualitative Research in Accounting & Management
ISSN: 1176-6093
Article publication date: 12 June 2007
Abstract
Purpose
This study aims to provide a modern perspective on the role of dividends in smaller developed countries such as Ireland by examining views regarding the determinants of payout levels, the role of taxation and the relevance of conventional signalling theory.
Design/methodology/approach
The study employs semi‐structured interviews with the financial directors of 20 leading Irish companies.
Findings
The results suggest support for the notion that dividend policy affects share valuations. However, views regarding this issue – and the role of taxation and signalling theory – vary markedly between quoted and unquoted firms as well as depending on firms' dividend histories.
Research limitations/implications
The study suffers from the problem that in interview‐based research the participants are necessarily a self‐selecting group. Notwithstanding this point, the evidence suggests that the views of managers in a nation with a small, but highly developed, stock market are in line with those in countries with much larger exchanges. Further research could usefully extend the analysis and establish whether similar views exist in other countries with relatively small stock markets, but where the exchange is in an “emerging” rather than “developed” state.
Originality/value
The contribution of the paper comes from the uniqueness of the Irish setting: the Irish market is relatively small but, unlike many similarly sized markets, it is highly‐developed, with long‐term historical links to the London Stock Exchange. The results, therefore, provide evidence about the extent to which earlier findings based on the world's largest developed markets also prevail in those that are more modestly sized.
Keywords
Citation
McCluskey, T., Burton, B. and Power, D. (2007), "Evidence on Irish financial directors' views about dividends", Qualitative Research in Accounting & Management, Vol. 4 No. 2, pp. 115-132. https://doi.org/10.1108/11766090710754196
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited