ABSTRACT
This study addresses the informativeness of accounting earnings in Brazil by analysing the impact of distributed dividends and the existence of financial constraints. Panel data regression with fixed effects and quantile regression estimated that the dividend informativeness in Brazil and the presence of financial constraints affect earnings informativeness, even when the different forms of earnings distribution in Brazil are considered. The main contribution of the study is to provide further evidence on the Brazilian market that adopts a rare mandatory minimum dividend rule, and moreover, defines the distribution of earnings under different tax regime categories.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 Following Easton and Harris (Citation1991), the informativeness model is given by the following equation:
where: Ri,t = the firm i’s return for fiscal year t.; ERANi,t = the firm i’s earnings for fiscal year t; β0 = intercept; β1 = the slope between the earnings and the return; ϵi,t = random error.