Abstract: Purpose - The purpose of the current study is to provide new evidence on the role of financial reporting quality in mitigating the restrictive effect of dividend policy on capital investment expenditure in some Egyptian listed companies. Based on the presented results of the recent studies about the restrictive effect of dividend policy on capital investment expenditure in the imperfect market. Yet in imperfect markets, external funding constraints that stem from information asymmetry can force firms to forgo valuable capital investment projects in order to pay dividends. Methodology- based on a cross-sectional sample of 35 firms on the year 2014, a cross-sectional regression model estimated to test the study question. Findings – The current study results show that high-quality financial reporting significantly mitigates the restrictive effect of dividend policy on capital investment expenditure.