The impact of dividend announcements on share price and trading volume: empirical evidence from the Gulf Cooperation Council (GCC) countries

Felimban, Razaz, Floros, Christos and Nguyen, Ann-Ngoc (2018) The impact of dividend announcements on share price and trading volume: empirical evidence from the Gulf Cooperation Council (GCC) countries. Journal of Economic Studies, 45 (2). pp. 210-230. ISSN 0144-3585 (doi:10.1108/JES-03-2017-0069)

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Abstract

This paper investigates the stock market response to dividend announcements in high growth emerging markets of Gulf countries. Our sample includes 1092 dividend announcements from 299 listed firms over the period 2010 - 2015. In the environment where there is an absence of capital gain and income tax, we find some evidence for the stock price reaction that partly supports the signaling hypothesis. Our findings show that the GCC market is inefficient because of the leakage information before the announcement in bad news, and the delay of share price adjustment in good news. In addition, we report significant trading volume reaction in all the three announcements clusters, where dividends increase, decrease, and are constant, lending support to the hypothesis that the dividend change announcements have an impact on the trading volume response due to different investors’ preferences. These results are highly recommended to financial analysts and investors dealing with the GCC market.

Item Type: Article
Research Areas: A. > Business School > Accounting and Finance
Item ID: 22557
Notes on copyright: This article is © Emerald Group Publishing and permission has been granted for this version to appear here (https://eprints.mdx.ac.uk/22557). Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited. This is the accepted version of the manuscript "The impact of dividend announcements on share price and trading volume: empirical evidence from the Gulf Cooperation Council (GCC) countries", published in the "Journal of Economic Studies"available via the journal site at: https://doi.org/10.1108/JES-03-2017-0069
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Depositing User: Ann-Ngoc Nguyen
Date Deposited: 27 Sep 2017 13:23
Last Modified: 04 Apr 2019 00:25
URI: https://eprints.mdx.ac.uk/id/eprint/22557

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