Information Content of Dividend Changes in an Emerging Market

Authors

  • Nur Adiana Hiau Abdullah Universiti Utara Malaysia, Malaysia
  • Rosemaliza Abdul Rashid Universiti Utara Malaysia, Malaysia
  • Yusnidah Ibrahim Universiti Utara Malaysia, Malaysia

DOI:

https://doi.org/10.32890/ijbf2004.2.1.1

Keywords:

Dividend announcements, emerging market, corporate finance theoretical models, company-specific characteristics

Abstract

Supports on the free cash flow and agency cost theory from dividend announcements studies have been heavily discussed in the Western literature, but they have not been given much attention in the Asian countries, particularly in Malaysia. This paper focuses on examining the relationship of the stock market reactions due to dividend announcements and ten company-specific variables identified from the literature as potential determinants. The results from cross-sectional and stepwise regressions both showed that none of the determining variables could explain the variation in cumulative abnormal returns (CARs) for the increasing dividend announcements. For decreasing dividend announcements, both regressions identified the degree of anticipation to be significant and inversely related to CARs. In addition, the indigenous population ownership, which is a unique characteristic of the Malaysian equity market is also found to be significant in influencing the effect of decreasing dividend announcements. The findings provide no support for the free cash flow and agency cost theory.

 

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Published

02-06-2004

Issue

Vol. 2 No. 1 (2004): International Journal of Banking and Finance (IJBF) Vol. 2, No.1, 2004

Section

Articles

How to Cite

Hiau Abdullah, N. A., Abdul Rashid, R., & Ibrahim, Y. (2004). Information Content of Dividend Changes in an Emerging Market. International Journal of Banking and Finance, 2(1), 1-18. https://doi.org/10.32890/ijbf2004.2.1.1

Research impact

Harvested 2026-09-07
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Identifiers DOI 10.32890/ijbf2004.2.1.1 OpenAlex W1605949749