We investigate the thresholds in net shareholder pay-outs (dividends, share buy-backs and issuances) of a large sample of UK quoted firms. Discretionary accruals are analysed at these thresholds in relation to earnings management. By examining distributions and using a robust test for discontinuities, we show the existence of thresholds at zero bins of variables in question. Additionally, by looking at differences in means and medians of discretionary accruals in sorted distributions, we find that they are statistically different from bin to bin in vicinity of previously identified thresholds.
Koren, J., & Valentinčič, A. (2013). Shareholders’ Pay-Out–Related Thresholds and Earnings Management. Economic and Business Review, 15(2). https://doi.org/10.15458/2335-4216.1189