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

Article


Felimban, R., Floros, C. and Nguyen, A. 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. https://doi.org/10.1108/JES-03-2017-0069
TypeArticle
TitleThe impact of dividend announcements on share price and trading volume: empirical evidence from the Gulf Cooperation Council (GCC) countries
AuthorsFelimban, R., Floros, C. and Nguyen, A.
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.

KeywordsGCC; Abnormal returns; Abnormal trading volume; Dividend announcements
PublisherEmerald
JournalJournal of Economic Studies
ISSN0144-3585
Publication dates
Print14 May 2018
Publication process dates
Deposited27 Sep 2017
Accepted14 Jul 2017
Output statusPublished
Accepted author manuscript
Copyright Statement

This article is © Emerald Group Publishing and permission has been granted for this version to appear in the Middlesex University Research Repository. 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

Digital Object Identifier (DOI)https://doi.org/10.1108/JES-03-2017-0069
Web of Science identifierWOS:000430474100001
LanguageEnglish
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