THE CAUSALITY AMONG SOUTH KOREAN FIRMS EARNINGS, DIVIDEND POLICY, AND INVESTMENT DECISION

초록

This paper examines the causality among earnings, dividends and investment using the Granger-causality model. Using a sample of publicly traded South Korean manufacturing companies, we find that investments cause earnings. We also find that earnings cause dividends and investments cause dividends. These findings are supportive of non0trivial agency costs, asymmetric information, and their implications. The finding imply that corporate financial decisions should be analyzed within a simultaneous model framework

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