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

Figures & data

Table 1. Variables in model

Variable	Index	Formula
Dependent variable
Investment	$in{v}_{i,t}$	$in{v}_{i,t}=\frac{investinfixedasset{s}_{i,t}}{totalasset{s}_{i,t-1}}$
Independent variables
Dividend	$di{v}_{i,t}$	$di{v}_{i,t}=\frac{announceddividend{ }_{i,t}}{totalasset{s}_{i,t-1}}$
Moderator
Accounting information quality	$a{q}_{i,t}$	$a{q}_{i,t}=-1\ast |{\mu }_{it}|$
Control variables
Firm size	$siz{e}_{i,t-1}$	$siz{e}_{i,t-1}=ln(totalasset{s}_{i,t-1})$
Leverage ratio	$le{v}_{i,t-1}$	$le{v}_{i,t-1}=\frac{totalliabilitie{s}_{i,t-1}}{totalasset{s}_{i,t-1}}$
Cash	$cas{h}_{i,t-1}$	$cas{h}_{i,t-1}=\frac{cashandcashequivalen{t}_{i,t-1}}{totalasset{s}_{i,t-1}}$
Profitability	$ro{a}_{i,t-1}$	$ro{a}_{i,t-1}=\frac{netincom{e}_{i,t-1}}{totalasset{s}_{i,t-1}}$
Fixed assets	$tan{g}_{i,t-1}$	$tan{g}_{i,t-1}=\frac{tangibleasset{s}_{i,t-1}}{totalasset{s}_{i,t-1}}$
Business cycle stages	$cycl{e}_{i,t-1}$	$cycl{e}_{i,t-1}=ln(\frac{averageaccountreceivable{s}_{i,t-1}}{netsale{s}_{i,t-1}}+\frac{averageinventor{y}_{i,t-1}}{costofgoodssol{d}_{i,t-1}})$
National governance quality	$pci$	National governance quality is measured by Provincial Competitiveness Index (PCI)
Gross domestic products	gdp	$gdp=\frac{gd{p}_t-gd{p}_{t-1}}{gd{p}_{t-1}}$
Inflation	inf	$inf=\frac{in{f}_t-in{f}_{t-1}}{in{f}_{t-1}}$

Table 2. Descriptive statistics

Variable	Obs	Mean	Min	Max
Investment	829	−0.067	−1.332	0.043
Dividend	829	0.058	0.010	0.190
Size	829	15.218	11.235	29.355
Leverage	829	0.589	0.000	3.290
Cash	829	0.076	0.000	0.522
Return on assets	829	0.068	−0.208	0.539
Tangible assets	829	0.250	0.000	1.783
Business cycle	829	5.065	3.060	8.704
Accounting information quality	829	−0.311	−1.793	0.005
National governance quality	829	4.134	4.090	4.210
Gross domestic product	829	0.061	0.030	0.090
Inflation	829	0.055	0.010	0.190

Table 3. Correlation matrix and VIF

	inv	div	size	lev	Cash	roa	tang	cycle	aq	pci	gdp	inf	VIF
inv	1.000
div	−0.022	1.000											1.03
size	0.038	0.048	1.000										1.17
lev	−0.085	0.079	0.227	1.000									1.11
cash	−0.075	−0.031	−0.195	−0.159	1.000								1.15
roa	−0.114	0.015	−0.086	−0.071	0.245	1.000							1.09
tang	−0.259	−0.043	−0.129	0.085	−0.082	−0.035	1.000						1.05
cycle	0.006	−0.057	0.054	−0.082	0.058	0.035	−0.034	1.000					1.09
aq	0.003	0.105	0.038	0.086	−0.148	0.068	0.036	−0.266	1.000				1.13
pci	0.066	0.000	0.177	0.023	0.001	0.005	0.003	0.011	0.033	1.000			1.04
gdp	0.028	0.001	−0.005	0.020	−0.033	0.051	−0.020	0.015	−0.003	.018	1.000		1.07
inf	−0.078	0.067	−0.045	0.061	0.023	0.051	−0.005	−0.003	0.010	−.035	−.240	1.000	1.08

Table 4. Two-step system GMM estimations for two models

Variables	Model 1		Model 2
inv	Coef.	p-values	Coef.	p-values
div	−0.487	.012*	−0.209	.027*
laq	0.212	.000***	0.110	.040*
divlaq			0.158	.000***
size L1.	0.087	.009**	0.011	.218
lev L1.	−1.281	.006**	−0.235	.025*
cash L1.	−0.027	.969	−0.107	.358
roa L1.	−0.276	.126	−0.041	.215
tang L1.	−1.968	.003**	−0.051	.076
cycle L1.	0.095	.014*	0.019	.037*
pci	0.170	.179	0.049	.000***
gdp	0.004	.576	0.003	.003**
inf	−0.015	.185	−0.002	.220
legend: * p<.05; ** p<.01; *** p<.001 All significant tests are two-tailed. The values in parentheses are robust standard errors.
Arellano–Bond test for AR(1) in first differences	z = −3.29 Pr > z = 0.008		z = −3.97 Pr > z = .011
Arellano–Bond test for AR(2) in first differences	z = −1.16 Pr > z = 0.238		z = −2.56 Pr > z = .543
Sargan test of overid. restrictions		.831		.982
Hansen test of overid. restrictions		.592		.499
Number of groups		71		71
Number of instruments		26		47

inv is the investment decisions; div is the dividends, laq is the accounting information quality at t-1; divlaq is the moderator in the relationship between investment decisions and dividends; size L1. is the firm size at t-1; lev L1. is leverage ratio at t-1; cash L1. is the cash at t-1; roa L1. is return on total assets at t-1; tang L1. is the tangible assets at t-1; cycle L1. is the business cycle at t-1; pci is the national governance quality; gdp is gross domestic product; inf is the inflation rate.