Download or read book Dividend-Based Earnings Management written by Eero Kasanen and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In bank-dominated capital markets with blocked ownership firms are expected to pay out a smooth stream of dividends for the large institutional equity holders. This forces companies to report earnings high enough to pay out the dividends. On the other hand taxation may create an economic motive to report as low earnings as possible. Our empirical evidence gives support for the existence of dividend-based earnings management behavior in Finland. In particular we find that the reported earnings depend on the dividend-based target earnings even after controlling for the economic performance.