Total views : 469

The Impact of XBRL Adoption on Corporate Dividend Policy: Evidence from Korean Firms


  • Cheongju University, Korea, Republic of


Background/Objectives: The objective of this paper is to examine the impact of XBRL adoption on corporate dividend policy using a sample of Korean firms. Methods/Statistical Analysis: We use logistic regressions with a binary dependent variable, XBRL dummy, to investigate the relation between XBRL adoption and the likelihood of paying dividends. We also employ fixed effects panel regressions with dependent variables, dividend payout, dividend yield and dividend to assets, to examine the influence of XBRL adoption on the level of dividends. Findings: Our findings are as follows. First, for the logistic regression, we find that XBRL adoption is negatively related to the likelihood of paying dividends, indicating that firms are less likely to pay dividends after XBRL adoption. Second, for the fixed effects panel regression, we find a negative relation between XBRL adoption and the level of dividends, suggesting that firms pay lower dividends after XBRL adoption. Improvements: This study extends prior studies that XBRL adoption can mitigate a firm's information asymmetry in the perspective of corporate finance. This study also contributes to the literature on dividend policy by providing evidence that XBRL adoption affects corporate dividend policy. Overall, the result suggests that the XBRL plays a role in the determination of corporate dividend policy.


Corporate Dividend Policy, Dividend, Signaling Theory, Financial Reporting Information Asymmetry, XBRL.

Full Text:

 |  (PDF views: 583)


  • Efendi J, Park J, Smith M. Do XBRL filings enhance informational efficiency? Early evidence from post-earnings announcement drift. Journal of Business Research. 2014 Jun; 67(6):1099–105.
  • Yoon H, Zo H, Ciganek A. Does XBRL adoption reduce information asymmetry? Journal of Business Research. 2011; 64(2):157–63.
  • Arnold V, Bedard J, Phillips J, Sutton S. The impact of tagging qualitative financial information on investor decision making: Implications for XBRL. International Journal of Accounting Information Systems. 2012 Mar; 13(1):2–20.
  • Hodge F, Kennedy J, Maines L. Does search-facilitating technology improve the transparency of financial reporting? The Accounting Review. 2004 Jul; 79(3):687–703.
  • Kim J, Lim J, No WG. The effects of first wave mandatory XBRL reporting across the financial information environment. Journal of Information Systems. 2012; 26(1):127–53.
  • Liu C, Wang T, Yao L. XBRL’s impact on analyst forecast behavior: An empirical study. Journal of Accounting and Public Policy. 2014 Jan –Feb; 33(1):69–82.
  • Bartley J, Chen A, Taylor E. A comparison of XBRL filings to corporate 10-Ks – evidence from the voluntary filing program. Accounting Horizons. 2011 Jun; 25(2):227–45.
  • Debreceny R, Farewell S, Piechocki M, Felden C, Gräning A, D’Eri A. Flex or break? Extensions in XBRL disclosure to the SEC. Accounting Horizon. 2011 Dec; 25(4):631–57.
  • Khang K, King TH. Does dividend policy relate to cross-sectional variation in information asymmetry? Evidence from return to insider trades. Financial Management. 2006 Dec; 35(4):71–94.
  • Li K, Zhao X. Asymmetric information and dividend policy. Financial Management. 2008 Nov; 37(4):673–94.
  • Hagerman R, Healy J. The impact of SEC-required disclosure and insider-trading regulations on the bid-ask spreads in the over-the-counter market. Journal of Accounting and Public Policy. 1992; 11(3):233–43.
  • Leuz C, Verrecchia R. The economic consequences of increased disclosure. Journal of Accounting Research. 2000; 38:91–124.
  • Welker M. Disclosure policy, information asymmetry and liquidity in equity markets. Contemporary Accounting Research. 1995; 11(2):801–27.
  • Bhattacharya S. Imperfect information, dividend policy and the bird in the hand fallacy. Bell Journal of Economics . 1979; 10(1):259–70.
  • John K. Williams J. Dividend, dilution, and taxes: a signaling equilibrium. Journal of Finance. 1985; 40(4):1053–70.
  • Miller M, Rock K. Dividend policy under asymmetric information. Journal of Finance. 1985 Sep; 40(4):1–21 .
  • Jensen M. Meckling W. Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics. 1976 Oct; 3(4):305–60.
  • Fama EF, French KR. Disappearing dividends: changing firm characteristics or lower propensity to pay? Journal of Financial Economics. 2001 Apr; 60(1):3–43 .
  • Jensen G, Solberg D, Zorn T. Simultaneous determination of insider ownership, debt and dividend policies. Journal of Financial and Quantitative Analysis. 1992 Jun; 27(2):247–63.
  • Chay JB, Suh J. Payout policy and cash-flow uncertainty. Journal of Financial Economics. 2009 Jul; 93(1):88–107.
  • Crutchley H, Hansen R. A test of the agency theory of managerial ownership, corporate leverage and corporate dividend. Financial Management. 1989; 18(4):36–46.
  • Rozeff M. Growth, beta and agency costs as determinants of dividend payout ratios. Journal of Financial Research. 1982; 5(3):249–59.
  • White H. A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica. 1980 May; 48(4):817–38.


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.