The impact of informed trading on dividend signaling: a theoretical and empirical examination

被引:14
作者
Fuller, KP [1 ]
机构
[1] Univ Georgia, Terry Coll Business, Dept Banking & Finance, Athens, GA 30602 USA
[2] Univ Michigan, Sch Business, Ann Arbor, MI 48109 USA
关键词
informed trading; dividend signaling; theoretical and empirical examination;
D O I
10.1016/S0929-1199(02)00052-4
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
This paper examines how the trading behavior of various investors impacts the market reaction to a dividend signal. The dividend signaling model incorporates asymmetric information among traders, firm insiders, and the market. This interaction among market participants explains why not all dividend increases are viewed by the market as good news. The model predicts that the announcement day returns for a dividend increase are inversely related to measures of informed trading and decreasing in the level of buy demand relative to sell demand. Further, the model hypothesizes that more informed trading results in larger dividend increases. Empirical tests confirm these predictions. (C) 2002 Published by Elsevier Science B.V.
引用
收藏
页码:385 / 407
页数:23
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