The Chinese stock dividend puzzle

Pan, Rulu, Tang, Xiangxi, Tan, Yanyan and Zhu, Qiaoqiao (2014) The Chinese stock dividend puzzle. Emerging Markets Finance and Trade, 50 3: 178-185. doi:10.2753/REE1540-496X500310

Author Pan, Rulu
Tang, Xiangxi
Tan, Yanyan
Zhu, Qiaoqiao
Title The Chinese stock dividend puzzle
Journal name Emerging Markets Finance and Trade   Check publisher's open access policy
ISSN 1540-496X
Publication date 2014-05-01
Year available 2014
Sub-type Article (original research)
DOI 10.2753/REE1540-496X500310
Open Access Status
Volume 50
Issue 3
Start page 178
End page 185
Total pages 8
Place of publication Armonk, NY, United States
Publisher M.E. Sharpe
Collection year 2015
Language eng
Abstract In this paper, we examine the announcement effects of dividends with an emphasis on stock dividends in China's capital market. We find that dividend-paying stocks exhibit significantly positive abnormal returns while non-dividend-paying stocks show a negative announcement effect. Further, we document that the cumulative abnormal returns for pure stock dividends and combined dividends are the main drivers of this announcement effect. In contrast, pure cash dividend stocks experience no significant price run-up before announcement. The significant announcement effect of stock dividends is robust to controlling the earnings surprise effect. We offer some discussion of the possible explanations.
Keyword Earnings surprise
Stock dividend
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2015 Collection
UQ Business School Publications
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