Stock Market Reaction to Various Dividend Announcements: Which Kind of Dividend Announcement is More Significant?

Liu, Jau-Yang; Chi, Der‐Jang

doi:10.1520/jte20120327

Cited by 10 publications

(4 citation statements)

References 42 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The negative relationship between dividend announcements and share price also found by Karim (2010) for London Stock Exchange, Vazakidis and Athianos (2010) for Athens Stock Exchange, Mamun et al (2013) for Bangladesh, Samwel et al (2014) for Nairobi Securities Exchange and Abbas (2015) for Damascus Stock Exchange. On the other hand our findings do not support those of Lukose and Rao (2010), Akron (2011), Miletic (2011), Sheikhbahaei et al (2011), Suwanna (2012, Demontis (2013), Perepeczo (2014), Liu and Chi (2014), Pan et al (2014) and Asiri (2014).…”

Section: Resultscontrasting

confidence: 90%

Market Reaction to Dividend Announcement: Evidence from Turkish Stock Market

Kadioglu¹,

Telceken²,

Ocal³

2015

IBR

View full text Add to dashboard Cite

Abstract:This study investigates market reactions to cash dividend announcements by analyzing abnormal returns around the declaration date in Borsa Istanbul. The study applies a panel regression method to a data set including 902 announcement made by 118 companies during the period from 2003 to 2015. It is found that there is a significant, negative relationship between cash dividends per share and abnormal returns following the announcement of dividends. Thus, the results support the tax-clientele effect hypothesis. When a given company announces cash dividends, shareholders start to sell their holdings in order to avoid more taxation in the future; therefore, market prices decrease. Furthermore, the results suggest that there is no statistically significant information leakage prior to the announcement date, and it seems that the inefficiency of the market decreases over time as prices adapt to new information more quickly.

show abstract

Section: Resultscontrasting

confidence: 90%

Market Reaction to Dividend Announcement: Evidence from Turkish Stock Market

Kadioglu¹,

Telceken²,

Ocal³

2015

IBR

View full text Add to dashboard Cite

show abstract

“…This discussion implies that the dividends are significantly related to stock market return (used to measure market value). However, we report an inverse relation instead of a positive relation as found in previous studies by Benartzi et al (1997), Feldstein and Green (1983), Khan et al (2011) and Liu and Chi (2014).…”

Section: Discussionsupporting

confidence: 70%

“…Maitah et al (2014) evaluated the association between economic value-added, stock price and dividends. Liu and Chi (2014) have reported that dividend declaration positively influences the market price of the company's shares. Choi et al (2014) also report that stock prices react positively towards differentiated dividends when total dividends paid are enhanced.…”

Section: Other Features Influencing Dividendsmentioning

confidence: 99%

Corporate governance impact on dividend policy of NIFTY-500 indexed Indian pharmaceutical companies (2014–2019)

Pinto¹,

Rastogi

2022

View full text Add to dashboard Cite

Purpose This study aims to evaluate the influence of corporate governance index (CGI), ownership concentration (OC) and other features on the dividends of listed Indian pharmaceutical companies. The other features included are leverage, excess return over cost of equity and stock-market return. This study thus helps to provide more insights on the dividend distribution issues for a shareholder in the challenging and demanding pharma industry, especially when stakes are high. Design/methodology/approach The data for all 26 pharmaceutical companies which form part of the NSE NIFTY-500 index for six years (2014–2019) is procured using Centre for Monitoring Indian Economy’s (CMIEs) Prowess database. An eight-pointer scale (unweighted scale) is used to develop the CGI. For OC, this paper considers the proportion of promoters’ shareholding, domestic institutional investors’ shareholding and foreign owners’ shareholding. Both static and dynamic panel data models are used to evaluate the effect of CGI and OC on dividends. Findings The panel data analysis depicts that CGI significantly positively influences the dividends of pharmaceutical companies in India. Thus, the authors find support for La Porta et al.’s outcome agency model. The results also reveal that only promoters’ holdings are significantly inversely related to dividends out of the three OC variables used for this study. This discussion implies that family-run pharmaceutical companies in India tend to retain profits instead of distributing dividends. Research limitations/implications This study provides two direct insights for policymakers and stakeholders. First, because this study shows that CGI significantly positively influences dividends, corporate governance (CG) is an essential factor for determining dividends. Second, because the results also reveal that OC in the hands of promoters hurts dividends, it implies that the higher the promoter holding, lesser is the dividend distributed by the company. Both these results can be used as a quantitative tool by investors to assess Indian pharmaceutical companies better. However, a similar study could be directed to assess the impact of CGI and OC on dividends of other industries. Moreover, additional variables of CG and OC can also be evaluated in further detail. There is also a need to empirically validate the impact of CG and OC on a company’s performance. Originality/value The results are robust and reveal that variation in CGI does impact dividend policy. This aids in confirming that CG is a crucial aspect influencing dividends. The findings also add to the increasing studies across the globe evaluating the influence of CG and OC on dividends.

show abstract

“…The keyword cloud in Figure 9 indicates that the documents in this cluster are concentrated on examining the impacts of "dividend announcements" (Chen et al, 2014;Gurgul et al, 2006;Liu and Chi, 2014), "interim dividend" (Nadig, 2017a(Nadig, , 2017b, "information content of dividend" (Chun-Tsen et al, 2011), "stock split announcements" (How and Tsen, 2019), on "stock market" "stock prices" "Shariah-compliant stocks" (Qamar et al, 2022), "firm valuation" in "India," "Malaysia" and other countries using the "market model" estimations. Overall, this cluster of documents concentrates on comprehending the intricate dynamics and implications of dividend-related events, their connection to financial markets and their effects on stock prices and firm valuation, with a notable emphasis on specific regions and estimation methodologies.…”

Section: Cluster 1: Dividend Announcement and Stock Market Performancementioning

confidence: 99%

Dividend announcements and stock returns: a retrospective analysis

Kumari,

Kumar,

Pandey

et al. 2023

QRFM

View full text Add to dashboard Cite

Purpose This study aims to provide insights into different aspects of the extant literature on the effects of dividend announcements. Along with other outputs of a bibliometric study, this study provides deeper insights into the concentration of the extant literature and suggest future research agendas. Design/methodology/approach This study uses the bibliometric, network and content analysis of the dividend announcement literature indexed in Scopus. This study presents the temporal analysis, the network of authors, countries, author citations and the co-occurrence of author keywords. This study provides the concentration of the extant literature in three clusters and unearth some key future research areas. This study uses the latent Dirichlet allocation method for robustness. Findings A total of 54 documents examining the US sample have received 1,804 citations. Interestingly, the first article on emerging markets was published in 2002, when at least 34 articles on developed markets had already been published from 1982 to 2001. The content analysis of top-cited literature unveils diverse insights into dividend announcements’ effects on financial markets. Contagion effects negatively impact non-announcing banks, particularly larger ones. Dividend maintenance affects stock market momentum, influencing loser returns. While current dividend/earnings news may not predict future company performance, information content dominates bond market reactions to post-dividend announcements. Concomitantly, while financially constrained firms exhibit short-term gains but worse long-term performance following dividend increases, larger stock dividends send stronger market signals in China. Originality/value This study significantly contributes to the bibliometric and content analysis literature by analyzing the sample documents based on the sample examined. To the best of the authors’ knowledge, no previous bibliometric study in this domain has been conducted to explore the markets (developed and emerging) to which the samples examined belong and the quality of publications from developed and emerging markets.

show abstract

Stock Market Reaction to Various Dividend Announcements: Which Kind of Dividend Announcement is More Significant?

Cited by 10 publications

References 42 publications

Market Reaction to Dividend Announcement: Evidence from Turkish Stock Market

Market Reaction to Dividend Announcement: Evidence from Turkish Stock Market

Corporate governance impact on dividend policy of NIFTY-500 indexed Indian pharmaceutical companies (2014–2019)

Dividend announcements and stock returns: a retrospective analysis

Contact Info

Product

Resources

About