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Price Reaction To Dividend Initiations And Omissions In Emerging Market: Evidence From Pre And Post Market Crisis In Bangladesh

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  • Sabur Mollah

Abstract

Dividend signalling and information content of dividends are areas of interest in financial literature. A vast majority of the research conducted on information content of dividend. However, no study has examined the effectiveness of dividend announcements as a signalling device in the stock market of Bangladesh. This study employs conventional event study methodology to investigate whether dividend announcements convey information to the market or whether investors dividend announcements as the signalling device of the firm’s prospects. The analysis is completed for the time period before and after the1998 market crisis in Bangladesh. The sample consists of cash dividend announcements for Dhaka Stock Exchange (DSE) listed firms preceding and following the market crisis. The empirical results suggest that the reactions to dividend announcements are not significant either preceding or following the financial crisis in Bangladesh, therefore, announcements of dividends neither convey information to the market nor do investors consider dividend announcements as a signal.

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  • Sabur Mollah, 2007. "Price Reaction To Dividend Initiations And Omissions In Emerging Market: Evidence From Pre And Post Market Crisis In Bangladesh," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 1(2), pages 51-68.
    • Handle: RePEc:ibf:ijbfre:v:1:y:2007:i:2:p:51-68
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    References listed on IDEAS

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    Cited by:

    1. Dr. Jeetendra Dangol, 2016. "Nepalese Stock Market Efficiency in Respect of Cash and Stock Dividend Announcement," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 7(3), pages 60-71, September.
    2. Eva Liljeblom & Sabur Mollah & Patrik Rotter, 2015. "Do dividends signal future earnings in the Nordic stock markets?," Review of Quantitative Finance and Accounting, Springer, vol. 44(3), pages 493-511, April.

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