Document Type

Peer-Reviewed Article

Publication Date

4-2015

Abstract

We examine the role of institutional investors’ investment horizon on the information content associated with dividend announcement surprises in the “dividend-reappearance era”. We find that the presence of institutional investors negatively affects the announcement period cumulative abnormal return (CAR), which suggests that institutional investors reduce information content of dividend announcements. This result is primarily driven by the fact that institutional investors, especially the not-short-horizon investors, do not prefer dividend surprises – which leads to lower announcement period CAR. We do not find support for institutional investors’ informed trading argument. Our study reveals that in order to understand the dynamics between institutional ownership and information content of dividend announcement, it is important to distinguish the institutional investors’ investment horizons.

Comments

Authors' version of the article is available here.

The final copy is published as:

Amin, Abu S. et al. "Institutional Shareholding and Information Content of Dividend Surprises: Re-examining the Dynamics in Dividend-Reappearance Era." Journal of Corporate Finance 31 (2015): 152–170.

DOI

10.1016/j.jcorpfin.2015.02.002

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.