Shareholder Wealth Effects of Dividend Policy Changes in an Emerging Stock Market: The Case of Cyprus

26 Pages Posted: 8 Jul 2015

See all articles by Nickolaos G. Travlos

Nickolaos G. Travlos

University of Surrey; ALBA Graduate Business School

Lenos Trigeorgis

University of Cyprus - Department of Public and Business Administration; King's College London; Massachusetts Institute of Technology (MIT) - Sloan School of Management

Nikos Vafeas

University of Cyprus

Date Written: July 7, 2015

Abstract

This article examines the stock market reaction to announcements of cash dividend increases and bonus issues (stock dividends) in the emerging stock market of Cyprus. Both events elicit significantly positive abnormal returns, in line with evidence from developed stock markets. This study contends that special characteristics of the Cyprus stock market delimit applicability of most traditional explanations for cash and stock dividends in favor of an information-signaling explanation. The empirical results are generally inconsistent with these contentions.

Keywords: cash dividends; emerging markets; stock dividends

JEL Classification: G34

Suggested Citation

Travlos, Nickolaos G. and Trigeorgis, Lenos and Vafeas, Nikos, Shareholder Wealth Effects of Dividend Policy Changes in an Emerging Stock Market: The Case of Cyprus (July 7, 2015). Multinational Finance Journal, Vol. 5, No. 2, p. 87-112, 2001, Available at SSRN: https://ssrn.com/abstract=2627623

Nickolaos G. Travlos (Contact Author)

University of Surrey ( email )

Guildford
Guildford, Surrey GU2 5XH
United Kingdom

ALBA Graduate Business School ( email )

Athinas Ave. & 2A Areos Str.
Vouliagmeni 166 71, Athens
Greece

HOME PAGE: http://www.alba.edu.gr

Lenos Trigeorgis

University of Cyprus - Department of Public and Business Administration ( email )

75 Kallipoleos Street
P.O. Box 20537
Nicosia CY-1678
Cyprus
00357 2 338762 (Phone)
00357 2 339063 (Fax)

King's College London ( email )

Strand
London, WC2R 2LS
United Kingdom

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Ave. E62-663
Cambridge, MA 02142
United States

Nikos Vafeas

University of Cyprus ( email )

75 Kallipoleos Street
Department of Public & Business Administration
Nicosia CY 1678
Cyprus
+357 2 892-256 (Phone)
+357 2 339-063 (Fax)

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