Shantanu Dutta

Why Firms Do Not Pay Dividends: The Canadian Experience

We use a survey approach to investigate the factors leading to the decision not to pay cash dividends in Canada. Our results show that Canadian managers perceive growth opportunities, low profitability, and cash constraints as the major underlying reasons for a firm’s decision not to pay dividends. Questionnaire results also show that, for non-dividend-paying firms, taxation is at best a second-order determinant of dividend policy and that stock repurchases are not substitutes for dividends. Finally, our findings are inconclusive regarding managers’ views on the relationship between dividend policy and stock prices and the signaling role of dividend policy.

Canadian corporate payout policy

Purpose - The purpose of this paper is to examine cash dividends and stock repurchases in Canada from 1988 to 2006 and their relationship with earnings. Design/methodology/approach - The study uses logistic regressions to examine the likelihood of paying dividends and the timing of repurchases and OLS regressions to examine the level of payout. Findings - The fraction of dividend-paying firms declines from 1988 to 2001 and then slightly rebounds until the end of the sample period in 2006. Firm size, profitability, investment opportunities, and catering incentives explain the likelihood of paying dividends. Unlike US firms, Canadian repurchase-only firms do not become important payers in terms of either the percentage of firms or the level of payout. Dividend-only firms pay out significant amounts of cash. Firms with both regular dividends and regular repurchases pay out the largest amount. The payout of different groups of payers is determined by their earnings. Testing firms with both regular dividends and regular repurchases reveals that earnings, undervaluation, and availability of cash explains the timing of repurchases but earnings mainly explains the level of repurchases. Research limitations/implications - Canadian data are unavailable after 2006, which precludes investigating the potential implications of the financial crisis beginning in 2007. Originality/value - This is the first paper to analyze the evolution of the relationship between payout and earnings in Canada.

E-Government Service Maturity and Development: Cultural, Organizational and Technological Perspectives

Implementing e-government services can give governments a competitive advantage by reducing operational and management costs, increasing transparency, and fulfilling their commitment to good governance. Yet, advances in e-government technologies and their applications present complex managerial and technological challenges. E-Government Service Maturity and Development: Cultural, Organizational and Technological Perspectives discusses important concepts for public administration reformation, taking into account the complex social, administrative, cultural, and legal problems of implementing modern digital systems. The book helps define empirical studies and methodologies for e-government research and identifies factors affecting the development and proliferation of e-government. Researchers and practitioners will gain an understanding of managing e-government; meeting their strategies and objectives; building trust, confidence, and security; providing interactivity and community; developing personalized experiences and content; increasing service selection; and other issues essential to adopting, implementing, and sustaining e-government.

Detecting financial restatements using data mining techniques

Both intentional and unintentional restatements may destroy shareholders value.Financial restatements (intentional/unintentional) detection models are developed.Performance of all widely used data mining techniques are compared.A reduced set of significant attributes are identified for predicting restatements.Class imbalance and cost imbalance issues are addressed. Financial restatements have been a major concern for the regulators, investors and market participants. Most of the previous studies focus only on fraudulent (or intentional) restatements and the literature has largely ignored unintentional restatements. Earlier studies have shown that large scale unintentional restatements can be equally detrimental and may erode investors confidence. Therefore it is important for us to pay a close to the significant unintentional restatements as well. A lack of focus on unintentional restatements could lead to a more relaxed internal control environment and lessen the efforts for curbing managerial oversights and instances of misreporting. In order to address this research gap, we focus on developing predictive models based on both intentional (fraudulent) and unintentional (erroneous) financial restatements using a comprehensive real dataset that includes 3,513 restatement cases over a period of 2001 to 2014. To the best of our knowledge it is the most comprehensive dataset used in the financial restatement predictive models. Our study also makes contributions to the datamining literature by (i) focussing on various datamining techniques and presenting a comparative analysis, (ii) ensuring the robustness of various predictive models over different time periods. We have employed all widely used data mining techniques in this area, namely, Decision Tree (DT), Artificial Neural Network (ANN), Nave Bayes (NB), Support Vector Machine (SVM), and Bayesian Belief Network (BBN) Classifier while developing the predictive models. We find that ANN outperforms other data mining algorithms in our empirical setup in terms of accuracy and area under the ROC curve. It is worth noting that our models remain consistent over the full sample period (2001-2014), pre-financial-crisis period (2001-2008), and post-financial-crisis period (2009-2014). We believe this study will benefit academics, regulators, policymakers and investors. In particular, regulators and policymakers can pay a close attention to the suspected firms and investors can take actions in advance to reduce their investment risks. The results can also help improving expert and intelligent systems by providing more insights on both intentional and unintentional financial restatements.

Corporate Governance and Dividend Payout Policy: Beyond Country-Level Governance

We address the mixed empirical findings on how corporate governance affects dividend payout policy by analyzing a large sample of firms from 30 countries. Our results indicate that firms with better firm-level governance pay more dividends, even when we control for country-level governance. However, this relation is only pronounced in countries with low shareholder rights. In addition, we find that when shareholder rights index is high, firm-level governance is unrelated to dividend payout. Our results are robust to the choice of firm-level governance index, the inclusion of the originality of law, culture, creditors’ rights, alternative measures of dividend payout, the hierarchical modeling technology, and approaches to address endogeneity concerns. We also find that dividend payments are associated with higher firm value, and investors positively value the dividend payments of poorly governed firms.