Share price informativeness and dividend smoothing behavior in GCC markets

Article


Felimban, R., Badreddine, S. and Floros, C. 2022. Share price informativeness and dividend smoothing behavior in GCC markets. Journal of Economic Studies. 49 (6), pp. 978-1001. https://doi.org/10.1108/JES-08-2020-0379
TypeArticle
TitleShare price informativeness and dividend smoothing behavior in GCC markets
AuthorsFelimban, R., Badreddine, S. and Floros, C.
Abstract

This paper examines the dividend smoothing behaviour in Gulf Cooperation Council (GCC) countries, in emerging markets where the response to news and the economic environment are different from those of developed countries. We examine the effect of share price informativeness on dividend smoothing in the (GCC) markets, using an unbalanced panel data for a sample of 628 GCC-listed firms during 1994-2016. For the regression analysis, the hypotheses are tested using panel regressions and GMM estimation. The empirical results can be summarised in the following manner: First, the Lintner model shows that the dividend smoothing degree in GCC firms is comparable to that of a developed market. Second, and importantly, the results reveal that the dividend smoothing in GCC firms is sensitive to private information of share prices. Finally, the findings indicate that information asymmetry and agency-based models affect the tendency to smooth dividends in the GCC markets.

KeywordsDividend smoothing; Share price informativeness; Information asymmetry; GCC
Sustainable Development Goals9 Industry, innovation and infrastructure
Middlesex University ThemeSustainability
PublisherEmerald
JournalJournal of Economic Studies
ISSN0144-3585
Publication dates
Online28 Jul 2021
Print24 Aug 2022
Publication process dates
Deposited18 Apr 2023
Submitted02 Aug 2020
Accepted29 Jun 2021
Output statusPublished
Accepted author manuscript
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Copyright Statement

Copyright © 2021, Emerald Publishing Limited
'This author accepted manuscript is deposited under a Creative Commons Attribution Non-commercial 4.0 International (CC BY-NC) licence. This means that anyone may distribute, adapt, and build upon the work for non-commercial purposes, subject to full attribution. If you wish to use this manuscript for commercial purposes, please contact permissions@emerald.com

Digital Object Identifier (DOI)https://doi.org/10.1108/JES-08-2020-0379
Web of Science identifierWOS:000678736200001
LanguageEnglish
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