Information Associated with Dividend Initiations: Firm-Specific or Industry-Wide?

Financial Management, Vol. 27, No. 3, Autumn 1998, Special Issue: Dividends

Posted: 9 Feb 1999

See all articles by John S. Howe

John S. Howe

University of Missouri at Columbia - Department of Finance

Yang-pin Shen

National Chung Cheng University - Department of Finance

Abstract

We examine the intra-industry information effects of announcements of dividend initiations. Our results indicate that the stock prices of industry competitors do not react to dividend initiations. Further, analysts do not revise their earnings forecasts for nonannouncing, rival firms. These findings are not sensitive to the manner in which we estimate abnormal returns or calculate forecast revisions. Thus, the information conveyed to the market by the decision to initiate dividends contains no industry-wide component. Dividend initiation appears to be a firm-specific event.

JEL Classification: G35

Suggested Citation

Howe, John S. and Shen, Yang-pin, Information Associated with Dividend Initiations: Firm-Specific or Industry-Wide?. Financial Management, Vol. 27, No. 3, Autumn 1998, Special Issue: Dividends, Available at SSRN: https://ssrn.com/abstract=143711

John S. Howe (Contact Author)

University of Missouri at Columbia - Department of Finance ( email )

224 Middlebush Hall
Columbia, MO 65211
United States
573-882-5357 (Phone)
573-884-6296 (Fax)

Yang-pin Shen

National Chung Cheng University - Department of Finance ( email )

Chia-Yi, Taiwan 621
China

HOME PAGE: http://www.cob.ohio-state.edu/fin/findir/individual.html?indivID=2328

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