A Theory of Income and Dividend Smoothing Based on Incumbency Rents

Dados Bibliográficos

ID10180931
AutoresDrew Fudenberg (0000-0002-6747-0125), Jean Tirole
Ano1995
Volume103
Fascículo1
Páginas75-93
Data de publicação1995-02-01
Peer ReviewedSim
Open AccessNão
TipoARTICLE
PeriódicoJournal of Political Economy (JOURNAL)
Identificadores do periódicoISSN: 0022-3808 • E-ISSN: 1537-534X
EditoraUniversity of Chicago Press (PUBLISHER • US)
DOI10.1086/261976
OpenAlexW2112952087
IdiomaEN
Citações recebidas9

Income smoothing is the process of manipulating the time profile of earnings or earnings reports to make the reported income stream less variable. This paper builds a theory of income smoothing based on the managers' concern about keeping their position or avoiding interference, and on the idea that current performance receives more weight than past performance when one is assessing the future. When investment is added to the model, so that income reports and dividends can be set independently, the authors find that both dividends and income reports may be smoothed and that dividends may convey information not present in the income report. Copyright 1995 by University of Chicago Press

Dividend · Earnings · Econometrics · Economic rent · Economics · Labour economics · Microeconomics · Net income · Position (finance · Smoothing · Statistics · Auditing, Earnings Management, Governance · Finance · Financial Literacy, Pension, Retirement Analysis · Financial Reporting and Valuation Research · Mathematics