Chasing Dividends during the COVID-19 Pandemic
Working Paper SES no 520
16 Pages Posted: 27 Oct 2020
Date Written: September 24, 2020
This paper investigates the impact of the COVID-19 pandemic on the trading behavior of investors around ex-dividend dates in Europe. The sudden decrease in the number of companies paying dividends reduced the opportunities to capture dividends. The firms that have maintained dividend payments during the pandemic thus attracted more interest than before. This led to a doubling in the magnitude of stock return patterns usually observed around ex-dividend days. Our evidence indicates that dividend-seeking investors are likely to be the main driver of the price patterns observed around ex-dividend dates.
Keywords: COVID-19, dividend capture, price pressure, ex-dividend date, event study
JEL Classification: G12, G14, G35
Suggested Citation: Suggested Citation