IDEAS home Printed from https://ideas.repec.org/a/taf/rjapxx/v16y2011i3p422-447.html
   My bibliography  Save this article

Stock dividend puzzles in China

Author

Listed:
  • H. Anderson
  • J. Chi
  • C. Ing-aram
  • L. Liang

Abstract

We examine the stock dividend puzzle in China by analysing the market reaction, who pays more or solely stock dividends compared with cash dividends and why. In general, stock dividends send a positive market signal that is stronger for larger stock dividends and simultaneous cash dividend declarations. Companies take advantage of this positive announcement reaction when they are cash poor, or have low profitability. In addition, when the overall market underperforms, cash dividends decrease while stock dividends increase significantly. Non-tradable shares are owned by two distinct groups that have different incentives and trading ability and therefore are likely to prefer different dividend policies. Consistent with this, we find evidence that state-owned shareholders prefer cash dividends, while legal person shareholders prefer stock dividends.

Suggested Citation

  • H. Anderson & J. Chi & C. Ing-aram & L. Liang, 2011. "Stock dividend puzzles in China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 16(3), pages 422-447.
    • Handle: RePEc:taf:rjapxx:v:16:y:2011:i:3:p:422-447
    DOI: 10.1080/13547860.2011.589630
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13547860.2011.589630
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13547860.2011.589630?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deng, Lu & Li, Sifei & Liao, Mingqing, 2017. "Dividends and earnings quality: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 255-268.
    2. Li, Xindan & Geng, Ziyang & Subrahmanyam, Avanidhar & Yu, Honghai, 2017. "Do wealthy investors have an informational advantage? Evidence based on account classifications of individual investors," Journal of Empirical Finance, Elsevier, vol. 44(C), pages 1-18.
    3. Nhut H. Nguyen & David Y. Wang, 2013. "Stock dividends in China: signalling or liquidity explanations?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(2), pages 513-535, June.
    4. Paul McGuinness & Kevin Lam & João Vieito, 2015. "Gender and other major board characteristics in China: Explaining corporate dividend policy and governance," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 989-1038, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjapxx:v:16:y:2011:i:3:p:422-447. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjap .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.