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Does Comprehensive Income Influence Dividends? Empirical Evidence from Japan

In: International Perspectives on Accounting and Corporate Behavior

Author

Listed:
  • Kunio Ito

    (Hitotsubashi University)

  • Takuma Kochiyama

    (Hitotsubashi University)

Abstract

This study examines whether comprehensive income (CI) and other comprehensive income (OCI) influence dividends of Japanese companies. While CI is considered to be the new “bottom line” of income statements of companies, the impact on dividends has not been examined empirically. Lintner (1956. The American Economic Review, 46, 97–113) and subsequent studies predict that only earnings that are more persistent and less volatile are related to dividends. Contrary to this prediction, our findings suggest that both CI and OCI have positive coefficients with dividend changes. Moreover, we further find that negative OCI is more likely to result in lower dividends. We propose several explanations for our findings.

Suggested Citation

  • Kunio Ito & Takuma Kochiyama, 2014. "Does Comprehensive Income Influence Dividends? Empirical Evidence from Japan," Advances in Japanese Business and Economics, in: Kunio Ito & Makoto Nakano (ed.), International Perspectives on Accounting and Corporate Behavior, edition 127, pages 107-125, Springer.
    • Handle: RePEc:spr:advchp:978-4-431-54792-1_5
    DOI: 10.1007/978-4-431-54792-1_5
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    Cited by:

    1. Suzuki, Tomohiro & Kochiyama, Takuma & 河内山, 拓磨, 2017. "Impact Of Fair Value Measurement On Corporate Investment: Other Comprehensive Income," Hitotsubashi Journal of commerce and management, Hitotsubashi University, vol. 51(1), pages 17-37, October.
    2. KOCHIYAMA, Takuma & 河内山, 拓磨 & SEKI, Koreyoshi, 2017. "Discretion in the Deferred Tax Valuation Allowance and Its Impact on Firms' Dividend Payouts," Working Paper Series 209, Management Innovation Research Center, School of Business Administration, Hitotsubashi University Business School.

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