The impact of earnings management on future dividend payout of Indian manufacturing firms

The study investigates the relationship between earnings management and subsequent dividend payout of Indian manufacturing firms. A sample of 228 firms was selected from top 500 companies listed on the Bombay Stock Exchange (BSE) for a period of four years (from 2008-2011). The findings of this study indicate that earnings management negatively impacts future dividend payout in the Indian manufacturing industry. This study contributes to the literature on the factors that impact dividend payout, and in particular on the association between several features of earnings management and dividend payout. The findings may be useful for financial managers, shareholders, stock investors, financial management consultants, and other stakeholders.