Investor Recognition and Stock Dividends
认领作者 认领管理权限
发布日期:2022年10月25日 上次修订日期:2022年10月25日


This paper documents a stock-dividend premium of around 10% when controlling for optimistic earnings growth and liquidity improvement. We propose an alternative explanation for the effect of stock dividends from the perspective of investor recognition. First, we find that stock-dividend premiums are positively related to an increase in investor base, particularly for firms with a small investor base. Second, an increase in investor base is due to individual investors, as they, especially those with a stronger propensity to gamble, are net buyers around the announcement of stock dividends, while institutional investors behave in the opposite manner. Finally, we show that after paying stock dividends, firms experience significant increases in speculative features, which are caused by clientele shifts toward individual investors as opposed to the undertaking of riskier projects by managers. As a whole, our results also indicate that an increase in investor base could be related to investors’ gambling preferences.


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Conghui Hu ; Yu-Jane Liu ; Investor Recognition and Stock Dividends (2022年10月25日)

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