The Role of Financial Reporting Quality in Mitigating the Constraining Effect of Dividend on Firm's Investment in Life Cycle Stages

The purpose of this study is to examine the role of financial reporting quality in mitigating the constraining effect of dividend on firms'' investment of listed companies in Tehran Stock Exchange in their life cycle stages. In this regard، numbers of 110 firms selected as sample of research for the period of 2006-2011. The panel data model is used to test the hypothesis. The results show that higher quality financial reporting mitigated the constraining (negative) effect of dividends on firms'' investment. Companies divided into growth، maturity and decline stages with Park and Chen (2006) model and the results show that higher quality financial reporting mitigated the constraining (negative) effect of dividends on firms'' investment in maturity stage. While there is not impact on relationship between dividend and firms'' investment in growth and decline stage.