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This paper examines investor preferences for holding stocks with different dividend yields in a low market interest rate environment. Using a unique dataset reflecting the ultimate stock ownership in publicly traded Swedish firms, we examine if different categories of investors have specific preferences for dividends and the size of the dividend yield. We find that domestic institutional investors, unlike foreign investors, have higher holdings in stocks with a high dividend yield. Using multivariate analysis, we document that stock portfolios with dividend-paying stocks outperform those with non-dividend-paying stocks. After controlling for the size of the dividend yield, we obtain mixed results involving stock performance for dividend-paying stocks and the results indicate no strong difference in the period following cuts in market interest rates.

This study examines the potential predictive power of changes in deferred revenues on future profitability based on evidence from the region of the Middle East and North Africa (MENA). It examines whether financial analysts should consider deferred revenues as useful information when evaluating a firm’s future profitability. A pooled OLS regression is used to test the relation. The observations of different companies from various periods are combined into a pooled sample of observations consisting of data from the 500 largest companies in the MENA in terms of market share. Aligned with the existing literature, the findings reveal that changes in deferred revenues are a predictive tool for future financial performance as proven by the positive correlation with the growth of future annual sales, gross profit margin, net profit margin, return on asset, and Tobin’s Q. Testing for this impact adds to the literature given various robustness tests under different circumstances and economic conditions.

The original version of this article unfortunately contained a mistake in some of the data in the Table 3.

Using a unique Swedish database that records the ultimate stockholdings in public firms, we decompose stock ownership by domiciles using votes rather than cashflows. We then study the impact of variables related to the lifecycle theory of dividends and the catering theory of dividends. We also examine the propensity of firms to pay dividends and/or activate a stock buyback program. Univariate analysis reveals a positive association between a firm’s maturity and its likelihood to pay dividends. Logistic regression finds a positive relation between payouts and retained earnings to total assets. Foreign institutional investors are less likely to hold dividend-paying stocks than domestic institutional investors. The analysis finds no support for the catering theory of dividends. After controlling for stock ownership, our evidence is consistent with the lifecycle theory of dividends, which states that more mature firms are associated with dividends. It also supports the transaction cost hypothesis claiming that foreign investors face additional administrative costs when holding dividend-paying stocks.

This study uses a survey approach to examine the views of corporate managers of non-dividend-paying firms listed on the Borsa Istanbul (BIST) in order to identify the factors leading to the decision not to pay cash dividends in Turkey. Our survey results show that cash constraints, growth opportunities, low profitability and earnings, and the cost of raising external funds (debt) are the major reasons inducing BIST firms not to pay dividends. Additionally, non-dividend-paying firms consider their shareholder preferences when setting a policy of paying no cash dividends. Yet, they neither view taxes as an important factor for paying no dividends nor perceive that stock repurchases are substitutes for cash dividends. Statistical analysis using secondary data of publicly-traded BIST firms reveals whether the actual corporate actions are consistent with the managerial views revealed by our survey research. These tests show that growth opportunities and debt level have a negative effect on the dividend payment decisions of BIST firms. Also, large blockholders and the existence of multiple large shareholders reduce the likelihood and intensity of paying a cash dividend in the Turkish market. Overall, the evidence suggests that non-dividend-paying companies are likely to be smaller in size, relatively younger (in the earlier stage of their life cycle) with high-growth opportunities or with a low level of profitability (or even loss) and small (negative) earnings. By contrast, highly-profitable, mature and large-size corporations are more likely to pay cash dividends.

PurposeThis study aims to survey managers of dividend‐paying firms listed on the Indonesian Stock Exchange (IDX) to learn their views about the factors influencing dividend policy, dividend issues, and explanations for paying dividends. The study also aims to focus on Indonesia, the largest national economy in Southeast Asia, because relatively few studies examine why Indonesian firms pay dividends.Design/methodology/approachThe primary means of gathering data is a mail survey. The two‐page survey instrument consists of three main sections: 22 factors for determining a firm's dividend policy; six questions that provide background information about the respondents and their firms; and 27 statements about dividend policy in general. Of the 163 firms surveyed, 52 firms responded, resulting in a response rate of 31.9 per cent.FindingsThe evidence shows that managers view the most important determinants of dividends as the stability of earnings and the level of current and expected future earnings. They also believe that the effects of dividends on stock prices and needs of current shareholders are important determinants. The evidence shows that managers of Indonesian firms perceive that dividend policy affects firm value. Managers seem to agree that multiple theories including signaling, catering, and life cycle explanations help to explain why their firms pay dividends.Research limitations/implicationsThe study focuses on a limited number of factors and issues involving dividend policy. While non‐response bias could potentially limit making generalizations to the population of IDX firms, statistical tests show no significant differences between respondents and non‐respondents on various firm characteristics.Practical implicationsThe evidence suggests that no universal set of factors is likely to be applicable to all firms when setting dividend policy.Originality/valueThis study presents new evidence on the perceptions of managers of dividend‐paying IDX‐listed firms about the factors influencing dividend policy, dividend issues, and explanations for paying dividends.

We examine whether a firm's sensitivity of investments to cash flow changes when it switches from the NASDAQ to the NYSE over the period 1992–2002. Contrary views exist on the effect of listing switches on investment sensitivity to cash flow. Investment–cash flow sensitivity is a proxy for the degree of uncertainty of using internal funds to finance a firm's investments. We use a least square dummy variable model to analyze panel data before and after switching to determine the impact of switching. Based on pooled data, our evidence is consistent with the view that NASDAQ-to-NYSE switchers have significantly lower investment–cash flow sensitivity, which means that firms rely less heavily on internal financing after switching and find accessing external financing easier. Thus, firms may benefit from switching in terms of a lower cost of external capital due to such factors as increasing visibility, liquidity, and reputation.

We test for reliable evidence of the day-of-the-week effect on both the mean and volatility for the S&P/TSX Canadian return index. Unlike previous studies, we permit several specifications for the error distribution — GARCH normal, Student's t, generalized error distribution, and double exponential distribution. Unlike other studies, we find that the day-of-the-week effect in both mean and conditional volatility is sensitive to the particular specification of the underlying distributions. We also find that using a regression analysis assuming a Student's t distribution is a better way to investigate this effect. Our evidence demonstrates the apparent fragility of previous empirical studies on calendar anomalies. Thus, our results serve as a warning that with financial data, the error distributional assumptions are critical to correctly identifying empirical regularities in the data.

This study examines short‐term stock price reactions to announcements of equity rights offerings in Singapore between 1983 and 2003 and investigates whether economic factors lead to different price reactions. The results show that the cumulative abnormal returns (CARs) associated with rights issues differ significantly across economic conditions at the time of issuance. Rights issues typically result in significantly large positive CARs during periods of economic growth but small positive but insignificant CARs during economic downturns. The CARs vary positively with Tobin’s q‐ratios, which indicate the availability of positive net present value investment opportunities of the firms issuing the rights. Our major finding is that the price reaction of Singapore firms to equity rights offerings is sensitive to economic conditions at the time of the rights issues.

PurposeThe purpose of this research is to analyze both survey and non‐survey data to draw conclusions about the status of survey‐based research in finance.Design/methodology/approachThe paper surveys editors from 15 core and 35 non‐core finance journals to learn their views about specific issues involving survey research and reviews 49 finance journals over the period 1985‐2005 to identify and classify published survey research.FindingsEditors indicate that survey‐based manuscripts typically go through the same review process as other manuscripts. They view the chief strengths of surveys as producing data unavailable from other sources and suggesting new avenues for future research. The major weaknesses of surveys are the difficulty of generalizing the results and non‐response bias. A review of 49 finance journals shows that 63.3 percent published at least one survey article during this period. The most common topic area for published surveys was financial management.Research limitations/implicationsThe paper contains the normal limitations associated with the survey method including potential non‐response bias.Practical implicationsSurvey‐based research has a definite place in financial research if such research is done to the same standards as other types of research.Originality/valueThis is the first study to examine the use of survey research in finance by asking journal editors their opinions and by inspecting finance journals' record of publication.

We investigate the financial sources of small firms through a survey of sample firms from West Texas. Evidence shows that the two most common start-up financing alternatives are personal savings and commercial bank loans. Commercial banks remain the most popular source of financing for present and future needs, followed by leasing companies and credit unions. Informal types of financing such as business credit cards, and trade credit are used in addition to lines of credit for transaction and working capital purposes. Firms typically review their financial performance monthly and use common cash balances as the primary financial tool.

We survey managers of Norwegian firms listed on the Oslo Stock Exchange about their views on dividend policy. The key factors that drive dividend policies are the level of current and expected future earnings, stability of earnings, current degree of financial leverage, and liquidity constraints. No significant correlation exists between the overall rankings of factors influencing dividend policy between Norwegian and U.S. managers. Norwegian managers express mixed views about whether a firm's dividend policy affects firm value. In general, management views provide support for the signaling hypothesis of payout policy but not the tax-preference explanation.

We survey 309 sample firms exhibiting behavior consistent with a residual dividend policy and their matched counterparts to learn how they set their dividend policies. The findings reveal that the sample firms are more likely than their counterparts to maintain a long-term dividend payout ratio, use long-run earnings forecasts in setting the dividend, and be unconcerned about the cost of raising external funds. Yet, firms behaving as though they follow a residual dividend policy generally do not profess to follow the policy. At best, the sample firms follow a “modified” residual policy in which they carefully manage their payout ratio and dividend trend. Although it may not be an explicit goal of such a dividend policy, consistently low free cash flow typically results.

We survey 642 top financial executives to learn their views about their firm’s share repurchases from January 1998 to September 1999. Based on 194 responses from managers of firms engaging in open-market repurchases, the results show that the most highly cited reasons for repurchasing shares of common stock are consistent with the signaling hypothesis, specifically the undervaluation version of this hypothesis. When compared to the results of previous surveys, our findings suggest that the importance management attaches to certain reasons for repurchasing shares of common stock may have changed over the past few decades. Reasons such as repurchasing shares to provide shares for incentive plans and to remove large blocks of stocks appear less important while reasons such as repurchasing shares to adjust the firm’s capital structure and to avoid dividend taxation appear more important.

This paper revisits the dividend puzzle, described here as questions about the relevance of dividend policy and how managers should (and do) determine dividend policy. We examine theoretical and empirical research on dividends and share repurchases because they are the principal mechanisms by which corporations disburse cash to their shareholders. Despite a voluminous amount of study, researchers still do not have all the answers to the dividend puzzle. However, we are closer to its resolution. We also do not have definitive answers to why managers choose one method of cash distribution over the other. Solving the dividend puzzle may depend on understanding the effects of various market imperfections or frictions. Because various imperfections affect firms differently, dividend policy may vary substantially from one firm to another. Models that consider the competing frictions on a firm-specific basis offer promise for resolving the dividend puzzle.

This study reports the results of a 1999 survey of Nasdaq-listed firms. Respondents provided information about the importance of 22 different factors that influence their dividend policy. Our results suggest that many managers of Nasdaq firms make dividend decisions consistent with Lintner's (1956) survey results and model. The results also show significant differences between the manager responses of financial and non-financial firms on nine of the 22 factors. This finding implies the presence of industry effects on dividend policy decisions. In general, the same factors that are important to Nasdaq firms are also important to NYSE firms.

This study examines the ethical attitudes and practices of securities analysts and portfolio managers from four Pacific Rim countries – Hong Kong, Japan, Singapore and Thailand – and compares the findings to a similar study of North American investment professionals to identify significant differences. The findings show that many differences exist due to cultural differences and differences in the regulatory environment between the Pacific Rim countries studied and North America.

This paper investigates the behavior of returns to share-holders of NYSE and AMEX firms that publicly announce the discontinuance of regular stock dividends. Using event-type methodology, the results show that the average abnormal return for NYSE and AMEX firms is negative but not statistically significant on the event date. Partitioning the sample by stock-related characteristics shows that for small firms with low stock prices and low institutional ownership, management's decision to drop regular stock dividends conveys a significantly negative signal, which, in turn, causes stock prices to decline. Firms that drop a stock payment and simultaneously initiate or increase cash dividends experience a significant increase in shareholder wealth. However, firms that drop the stock dividend policy and do not begin a cash dividend policy experience a sharp decline in shareholder wealth.

This study reports the results ofa survey about the ethical behavior ofsecurities analysts and portfolio man- agers in Singapore and compares the responses ofinvestment professionals in Singapore and North America. The evidence shows that most respondents from Singapore view investment professionals as "moderately ethical." They also believe that ethical standards among investment professionals in Singapore have improved during the past decade and are likely to improve over the next ten years. Respondents also believe senior management plays a key role in providing training and education for investment professionals. The most commonly reported ethical or legal violations are trading based on inside information or communicating inside il1formatio11.. The most important deter- rent to unethical or illegal behavior is concern about government anctions. A comparison of the responses from inlestment profes ionals in Singapore and North America shows many significant d!fferences, which largely may be explained by different cultural and regulatory environments.

Each year many firms repurchase shares of their common stock. Research evidence shows that when firms announce the repurchase of common stock, their share prices typically rise. Numerous studies attribute these increases to a signaling effect. But some firms that announce their intention of repurchasing shares of common stock either repurchase no shares at all or repurchase fewer shares than initially announced. Although the practice of firms intentionally announcing the repurchase of more shares than they expect to repurchase is illegal, the expected increase in share prices may give firms an incentive to make such false announcements.This study surveys top financial executives to learn the extent that firms repurchase fewer shares than announced, identify the reasons for this activity, and learn how managers view this activity. We surveyed 642 firms that conducted common stock repurchases from January 1998 to September 1999. Based on 218 responses, we find that while managers are uncertain about the legality of this activity, they believe that the intentional repurchase of fewer shares than announced is unethical, sends a false signal to the market, and damages the firm’s credibility with its stockholders. Managers also believe that firms repurchasing fewer shares than announced should publicly reveal both the reason for not repurchasing all shares and the amount by which the repurchase fell short of the firm’s announced intentions. Despite these beliefs, managers report that repurchasing fewer shares than announced is a common practice.

This study examines the relationship between insider trading and market liquidity (spread and depth) of NASDAQ-100 stocks. Tests on an intraday sample of sell trades show no evidence of cross-sectional association between the width of the spread and insider trading, but detect some widening of the spread after the fact. Overall, our results provide mixed evidence on the ability of NASDAQ dealers to unravel informed order flow and adjust spreads accordingly. Their short-term behavior suggests an inability to detect insider trading and widen spreads, but their behavior over time suggests that dealers may attempt to recover what they apparently lose at a given point and time.

This study examines the market behavior of common stocks transferring from the NASDAQ stock market to the New York Stock Exchange from 1982 to 1989. Using event study methodology, the study tests the joint liquidity-signaling hypothesis that a stock's pre-listing liquidity and earnings per share (EPS) growth (a proxy for signaling) affect the market behavior around NYSE listings. The results show that the market responds more favorably to stocks with low liquidity and high signaling than to stocks with high liquidity and low signaling before listing. Stocks in the former group do not have an anomalous pattern of negative post-listing abnormal returns. Copyright 1993 by MIT Press.

This paper examines the impact of dual domestic listing of common stocks on shareholder wealth. The sample contains 137 AMEX- and NYSE-listed companies that dually listed their common stocks on the Pacific and Midwest Stock Exchanges between 1984 and 1988. Because the sample stocks do not have unlisted trading privileges, dual listing changes the market structure in which the stocks traded. Changes in market structure may affect stock returns through the liquidity services provided by the competing markets and through the possible nonhomogeneous clientele across markets. Using standard event methodology to examine stock market behavior around dual listing shows that the net effect of dual listing on returns is negative. Such negative returns suggest that corporate managers have reasons for dual domestic listing other than increasing shareholder wealth.

(1992). The Effect on Spread and Volume of Switching to the NASDAQ National Market System. Financial Analysts Journal: Vol. 48, No. 1, pp. 83-86, 88.

Corporate managers often cite improved firm visibility as a motive for listing on the New York Stock Exchange (NYSE). We use three proxies to test this motive: the number of analysts following a firm, the number of institutional shareholders, and the number of shares held by institutions. We compare visibility changes over successive six-month periods for a sample of firms that listed on the NYSE and find that the changes in the post-listing period are less than the changes for the two pre-listing periods. Further tests suggest that increased visibility for a firm is primarily associated with changes in market capitalization, not with listing itself.

Each year some corporate managers decide to change the listing of their firm's common stock from the American Stock Exchange (AMEX) to the New York Stock Exchange (NYSE). In making this decision to switch auction markets, managers presumably act in the best interests of their shareholders. The potential implications of this managerial decision are far-reaching because differences between the AMEX and NYSE may affect security returns and share value. Little empirical research is available about whether shareholders benefit if a firm switches the trading location of its common stock from the AMEX to the NYSE.

Because of the scope of the study, it is not possible to make general statements about the exact variables which should be used in client-specified valuation models. However, the interpretation of the results of the study suggests several tentative conclusions.First, the investor's investment analysis of common stock appears to be a multi-dimensional process. That is, more than one decision variable is involved in the analysis. Hence, it may be reasoned that client-specified valuation models should involve several independent variables.Second, the dividends factor is the most important of the three factors identified through factor analysis. This finding suggests large differences in perceptions among investors concerning the importance of dividends.Third, future expectations and financial stability are the other factors identified through factor analysis. These factors also represent areas of large perceptual differences among investors concerning their importance.Finally, investors are of two distinct types: those who seek dividends and those who seek capital appreciation. This finding provides a partial explanation for the inability of researchers using traditional methodology to predict a firm's stock price behavior. Thus, investors do not comprise a single homogeneous class. This suggests that certain types of stocks prove attractive to particular types of investors, i.e., a "clientele effect." Hence, it is recommended that researchers interested in share price research segment the market by class of investor. Such investigation of investor socioeconomic and behavioral characteristics should prove worthwhile in providing a greater understanding of the factors influencing investor behavior.

Meetings need not be boring or unproductive. In dispelling some myths about meetings, the author defines three general meeting types: educational, informational, and decision-making. Many meetings are not effective because it wasn't clear which type was being conducted. When people understand the purpose of a particular meeting and recognize their roles, the chances of a successful meeting are increased. Responsibilities of the leader and the participants are offered as are suggestions on how to encourage constructive conflict.