Stock Splits: An Institutional Investor Preference
Helen B. Mason
Roger M. Shelor
Ohio University - College of Business
Financial Review, November 1998
This study examines the relationship between firm stock split behavior and pre-split institutional ownership. Results identify a positive relationship between pre-split institutional ownership measures and split behavior. A firm size effect implies that larger firms have higher percentages of institutional ownership and that these owners either encourage stock split behavior, have the ability to identify firms with stock split characteristics in the pre-split period, or both. Institutions purchasing shares in the identified firms in the pre-split period, therefore, expect short-term and long-term earnings increases.
JEL Classification: G12, G14Accepted Paper Series
Date posted: October 16, 1998
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