<abstract xmlns="http://www.w3.org/1999/xhtml"><p> This article analyzes the investor reaction to information on the final value of dividend payouts for companies listed on the Warsaw Stock Exchange, using the event study methodology. Our research shows that investor reaction is positive for irregular payouts and both the initiation of and the increase in payouts, while negative for the resumption and of and decreases in payouts. The magnitude of the reaction is also higher for the initiation of payouts than either the increases in, or irregular payouts.</p><p>This study contributes to the literature on dividend policy by presenting results for the emerging economy of Poland. Moreover, it pays particular attention to statistical issues related to the event study methodology, i.e., the verification of assumptions behind the method of returns model estimation. It also compares investor reaction to dividend changes assessed on the basis of different measures, and underlines the dependence of the results on the choice of the parameters assumed (e.g., event window length).</p></abstract>

This article analyzes the investor reaction to information on the final value of dividend payouts for companies listed on the Warsaw Stock Exchange, using the event study methodology. Our research shows that investor reaction is positive for irregular payouts and both the initiation of and the increase in payouts, while negative for the resumption and of and decreases in payouts. The magnitude of the reaction is also higher for the initiation of payouts than either the increases in, or irregular payouts.This study contributes to the literature on dividend policy by presenting results for the emerging economy of Poland. Moreover, it pays particular attention to statistical issues related to the event study methodology, i.e., the verification of assumptions behind the method of returns model estimation. It also compares investor reaction to dividend changes assessed on the basis of different measures, and underlines the dependence of the results on the choice of the parameters assumed (e.g., event window length).

Investor Reaction to Information on Final Dividend Payouts on the Warsaw Stock Exchange – an Event Study Analysis

Ph. D. Student, Capital Markets Department, Warsaw School of Economics, Poland

International Journal of Management and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This article analyzes the investor reaction to information on the final value of dividend payouts for companies listed on the Warsaw Stock Exchange, using the...

Investor Reaction to Information on Final Dividend Payouts on the Warsaw Stock Exchange – an Event Study Analysis

Published Online: Jun 27, 2015

Page range: 127 - 146

DOI: https://doi.org/10.1515/ijme-2015-0019

© 2015

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.