Stock Market Liquidity and Firm Dividend Policy

Banerjee, Suman; Gatchev, Vladimir A.; Spindt, Paul A.

doi:10.1017/s0022109000003318

Cited by 161 publications

(87 citation statements)

References 58 publications

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“…Blum and Keim (2012) showed that institutional participation in the US stock market played an ever increasing role in explaining cross-sectional variation in stock market illiquidity. Banerjee et al (2007) found some evidence that sensitivity of firm value to innovations in aggregate liquidity declines after dividend initiations. Indeed, Baker and Wurgler (2004) presented significant evidence that the payout policy of the firm was related to the liquidity of its common stock.…”

Section: Literature Reviewmentioning

confidence: 99%

Stock market liquidity and firm performance

Singh¹,

Gupta²,

Sharma³

2015

10.5267/j.ac

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This paper investigates the relation between stock liquidity and firm performance. Liquidity plays an important role on performance of firms listed in Stock Exchange. When there is a good flow of trading stocks, people could expect more financing through absorbing investors on the market. This study examines the relationship between stock market liquidity and firm performance. The sample of the study was the continuously NSE listed top ten indices over the period [2005][2006][2007][2008][2009][2010][2011][2012][2013][2014]. To check the relationship between stock market liquidity and firm performance, the ordinary least sequence and general linear models were applied on Gretl and SPSS, respectively. The results of this study showed positive relationship between independent variables, return and age on dependent variable Tobin's Q. Further relationship between stock market liquidity and firm performance was also check and it was found that stock market liquidity was correlated with higher firm performance as measured by Tobin's Q.Growing Science Ltd. All rights reserved. 5

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Section: Literature Reviewmentioning

confidence: 99%

Stock market liquidity and firm performance

Singh¹,

Gupta²,

Sharma³

2015

10.5267/j.ac

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“…In addition, more mature firms with higher retained earnings to equity ratio have higher probability of paying dividends. Moreover, in line with Banerjee et al (2007) and Rozeff (1982), firms with higher stock liquidity and insider ownership have lower www.ccsenet.org/ijef…”

Section: Resultsmentioning

confidence: 79%

“…Besides, Banerjee, Gatchev, and Spindt (2007) examine the relationship between stock liquidity and dividend policy with a sample of a sample of NYSE and AMEX listed firms from 1963 to 2003. Their findings show that after controlling other firm characteristics, firms with higher stock liquidity are less likely to pay dividends.…”

Section: Decisions Of Paying or Not Paying Dividendsmentioning

confidence: 99%

A Two-Step Approach to Investigate Dividend Policy: Evidence from Vietnamese Stock Market

Alphonse¹,

Trần²

2014

IJEF

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Dividend policy includes two steps of making decisions, namely dividend payment and dividend magnitude; however, several prior studies focus on only one in two steps. This study investigates dividend policy in Vietnamese stock market with Heckman's two-step regression approach which fixes the selection bias caused by censored research data. Research findings show that in the first step, likelihood of dividend payment is positively affected by profitability, firm size and earned/contributed capital mix and state control while it is negatively related to investment opportunities, stock liquidity and insider ownership. In the second step, investment opportunities and insider retention have a negative impact on dividend yields while leverage has negative and positive impacts on payout ratio and dividend yield respectively. Contrary to free cash flow hypothesis, free cash flows to total assets ratio is negatively related to payout ratio.

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“…Therefore I use the company earned/contributed equity mix defined as retained earnings to the book value of total equity as a control variable. (Banerjee, Gatchev, & Spindt, 2007) find that firm stock turnover is related to payouts so I include it as a control. I include the ratio of firm debt to assets as a control because Jensen (1986) argues that debt can substitute for payouts as discipline for management.…”

Section: Datamentioning

confidence: 99%

Institutional Investors, Stock Repurchases and Information Asymmetry

Scott

2014

International Journal of Financial Research

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This paper seeks to determine if institutional investors influence stock repurchases. Specifically, this study tests whether institutional investors encourage stock repurchases in firms with high information asymmetry. Firm and year fixed effect regressions examining the effect of changes in institutional investor levels to subsequent changes in stock repurchase levels are used. For robustness, regressions are run using difference-GMM regressions and regressions for different time periods on the same relationship. I find that increased institutional ownership leads to increased stock repurchases and this relationship is stronger in firms with higher information asymmetry. Results indicate that institutional investors encourage management to increase repurchases so as to exploit their informational advantage over less informed investors about the true value of the firm. Institutions are the dominant force in U.S. stock ownership. The results in this paper indicate that institutional investors are using their informational advantage in firms that are difficult to value in an attempt to boost their return at the expense of other less informed shareholders.

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Stock Market Liquidity and Firm Dividend Policy

Cited by 161 publications

References 58 publications

Stock market liquidity and firm performance

Stock market liquidity and firm performance

A Two-Step Approach to Investigate Dividend Policy: Evidence from Vietnamese Stock Market

Institutional Investors, Stock Repurchases and Information Asymmetry

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