Accounting information quality moderates the effect of dividends on investment decisions: Evidence in Vietnam

Abstract

The author specifies the pivotal role of accounting information quality in moderating the influence of dividends on the investment decisions of listed firms in Vietnam from 2009 to 2020. In this study, the significant dependence of investment on dividends is proved by the Two-Step System Generalized Method of Moments. The key findings show that dividends and investment decisions have a statistically significant negative relationship. The relationship is clarified based on agency theory, asymmetric information theory, and signaling theory, which are used in low-information-transparency markets such as the Vietnamese market. Primarily, the role of a moderating factor could mitigate the negative relationship above.

Keywords:

• accounting information quality
• agency theory
• asymmetric information theory
• dividends
• investment
• signaling theory
• SGMM
• Vietnam

JEL Classification:

• D25
• D82
• E22
• G11
• L21

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Quoc Trung Nguyen Kim

Quoc Trung Nguyen Kim Corresponding; Faculty of Accounting - Auditing; the University of Finance – Marketing, Vietnam. Email: [email protected]. Ph.D. Nguyen Kim Quoc Trung is currently a lecturer of the Faculty of Accounting - Auditing; the University of Finance – Marketing, Vietnam. He is interested in researching the banking sector and finance and accounting. His fields of research and teaching are banking, finance, and governance. He has written a total of some articles in various international journals and conferences, including International Journal of Economics and Finance Studies, Cogent Business & Management, International Journal of Interdisciplinary Organizational Studies; and has served as a reviewer of some international journals listed in Scopus, such as Cogent Economics and Finance; International Journal of Law and Management; Journal of Financial Services Marketing; International Journal of Asian Business and Information Management.