Ownership Structure and the Credibility of Special Dividend Signal: Evidence from Imputation Environment

44 Pages Posted: 1 Feb 2004

See all articles by Lukas Setia-Atmaja

Lukas Setia-Atmaja

Monash University - Department of Accounting

Balasingham Balachandran

La Trobe University - School of Economics and Finance; Financial Research Network (FIRN)

Michael T. Skully

Monash University - Department of Banking and Finance; Financial Research Network (FIRN)

Date Written: January 21, 2004

Abstract

This study examines the role of ownership structure in validating the credibility of special dividend signal in the absence of a double taxation of dividends in a full imputation environment. Using a sample of Australian special dividend announcements from January 1996 to June 2002, we document positive price reactions to special dividend announcements. Furthermore, we find that insider ownership, outsider ownership, the presence and concentration of large shareholders, and family blockholdings are all positively related to special dividend announcement effects. As such, this paper provides considerable support for the notion that ownership structure affects the credibility of the signal and results in greater announcement effects.

Keywords: Ownership structure, signal credibility, special dividends, imputation environment.

JEL Classification: JEL G14, G35

Suggested Citation

Setia-Atmaja, Lukas Y. and Balachandran, Balasingham and Skully, Michael T., Ownership Structure and the Credibility of Special Dividend Signal: Evidence from Imputation Environment (January 21, 2004). Available at SSRN: https://ssrn.com/abstract=488762 or http://dx.doi.org/10.2139/ssrn.488762

Lukas Y. Setia-Atmaja

Monash University - Department of Accounting ( email )

Building 11E
Clayton, Victoria 3800
Australia
(61)3 9903 32531 (Phone)
(61)3 9903 2422 (Fax)

Balasingham Balachandran (Contact Author)

La Trobe University - School of Economics and Finance ( email )

La Trobe University
Bundoora, Vic, 3086
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Michael T. Skully

Monash University - Department of Banking and Finance ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia
+61 3 9903 2407 (Phone)
+61 3 9903 1443 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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