TY - JOUR
T1 - Institutional shareholding and information content of dividend surprises
T2 - Re-examining the dynamics in dividend-reappearance era
AU - Amin, Abu S.
AU - Dutta, Shantanu
AU - Saadi, Samir
AU - Vora, Premal P.
N1 - Funding Information:
We gratefully acknowledge the insightful comments and suggestions of Jeffry Netter and the anonymous referee, which have significantly improved the paper. We would like to thank Kose John, Praveen Kumar, Lamia Chouru, Arup Ganguly, Lin Ge and Ligang Zhong for their helpful comments and suggestions. We also thank the seminar participants at the FMA conference and University of Ottawa for their helpful comments. Abu Amin would like to acknowledge the support and comments received from his colleagues at Sacred Heart University, CT. Shantanu Dutta acknowledges the financial support from Canada's Social Sciences and Humanities Research Council (SSHRC) .
Publisher Copyright:
© 2015 Elsevier B.V.
PY - 2015/4/1
Y1 - 2015/4/1
N2 - We examine the role of institutional investors' investment horizon on the information content associated with dividend announcement surprises in the "dividend-reappearance era". We find that the presence of institutional investors negatively affects the announcement period cumulative abnormal return (CAR), which suggests that institutional investors reduce information content of dividend announcements. This result is primarily driven by the fact that institutional investors, especially the not-short-horizon investors, do not prefer dividend surprises - which leads to lower announcement period CAR. We do not find support for institutional investors' informed trading argument. Our study reveals that in order to understand the dynamics between institutional ownership and information content of dividend announcements, it is important to differentiate the institutional investors' investment horizons.
AB - We examine the role of institutional investors' investment horizon on the information content associated with dividend announcement surprises in the "dividend-reappearance era". We find that the presence of institutional investors negatively affects the announcement period cumulative abnormal return (CAR), which suggests that institutional investors reduce information content of dividend announcements. This result is primarily driven by the fact that institutional investors, especially the not-short-horizon investors, do not prefer dividend surprises - which leads to lower announcement period CAR. We do not find support for institutional investors' informed trading argument. Our study reveals that in order to understand the dynamics between institutional ownership and information content of dividend announcements, it is important to differentiate the institutional investors' investment horizons.
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U2 - 10.1016/j.jcorpfin.2015.02.002
DO - 10.1016/j.jcorpfin.2015.02.002
M3 - Article
AN - SCOPUS:84924954253
SN - 0929-1199
VL - 31
SP - 152
EP - 170
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
ER -