We consider situations where the a priori guidance provided by theoretical considerations indicates only that the function linking the endogenous and exogenous variables is monotone and concave (or convex). We present methods to evaluate the adequacy of a parametric functional form to represent...

This research examines whether dividend changes convey information about future profitability. The difference GMM approach is employed to overcome the heterogeneity and endogeneity problems inherent in dynamic panel data models. Our evidence shows that previous abnormal earnings are a good...