This paper re‐examines the dividend policy issue by conducting a simultaneous test of the alternative explanations of corporate payout policy using a two‐step procedure that involves factor analysis and multiple regression. Several new proxies for theoretical attributes that have appeared in the literature are introduced, including the role of managerial dimensions in determining dividend policy. Strong support is found for the transaction cost/residual theory of dividends. pecking order argument, and the role of dividends in mitigating agency problems. Strong support is also found for the role of managerial consideration in affecting the firm's payout policy; specifically, firms that maintain stable dividend policies and firms that enjoy financial flexibility pay higher dividends. The results appear to support the tax clientele argument.

This paper assesses the stock market reaction to announcements of corporate headquarters relocations and examines financial and geographical factors related to wealth effects and factors that influence the decision to relocate corporate headquarters. The results indicate that announcements of relocations are associated with significant positive stock price effects. On average, the stock price of relocating firms increases by 1.29% during the two-day period around the announcement. Abnormal returns are positively related to the availability of labor and negatively related to the cost of living in the new location and the change in employment levels. A logit analysis indicates that the probability of a firm relocating is partially determined by the firm size and the rental expenses/sales ratio. The results also indicate that firm size, the employment/asset ratio levels, and listing in the NYSE/AMEX affect the decision to relocate to a Fortune-ranked city. Finally, firms relocating to "Fortune"-ranked cities are characterized by a high level of insider ownership relative to firms moving to non-ranked cities. Copyright American Real Estate and Urban Economics Association.

This paper examines the underpricing of IPOs of financial institutions over the period 1983 to 1987. Based on a sample of 185 banks and savings and loan associations (including S&L conversions) and a control sample of 1,361 industrial firms, results indicate that in general IPOs of financial institutions are significantly less underpriced than those of the non‐financial institutions. In particular, the IPOs of non‐S&L conversion financial institutions are less underpriced than the IPOs of non‐financial institutions.

This study examines stock price dynamics of contagion effects in overlapping markets using an exponential ARCH (Autoregressive Conditional Hetero‐scedastic) model. Specifically, the stock price dynamics among the oil and oil‐related industries of the US are examined to see how stock price movements in one industry affect those of the related industries. The results suggest that when the amount of price innovations is larger than the expected amount, volatility of stock returns will be affected. The results further show that this influence comes from the oil‐service industry and spreads to the oil industry and the gas industry. That is, inter‐industry contagion effects do exist. In addition, when the firms of the oil industry are grouped into three size categories ‐ large, medium and small ‐ the results indicate that the source of contagion is from the large and the small oil firms. The influence of their price innovations spread to medium‐sized oil firms, the oil‐service industry and the gas industry. That is, the inter‐industry and intra‐industry contagion effects exist simultaneously.

This paper examines the impact of liberalization on initial public offering (IPO) performance in postapartheid South Africa. Results indicate a significant reduction in IPO underpricing in the postapartheid period relative to the level reported for IPO offerings in the apartheid period. Significant long-term underpricing for periods of up to two years following the IPO is noted. Many IPO offerings in South Africa are delisted and acquired or merged within three to five years of the IPO offering. Subsequently acquired IPOs are found to be more underpriced than are nonacquired IPOs, a result consistent with the use of IPOs as a means of facilitating acquisitions and mergers.

We examine market reaction to corporate spin‐offs that are eventually withdrawn. These spin‐offs do not experience the significant positive share price response reported for spin‐offs generally. The overall market reaction to both the initial spin‐off announcement and the withdrawal announcement is not significant. When a reason is provided for withdrawing a spin‐off, there is a significant positive market reaction; otherwise, there is a significant negative reaction. Firms that withdraw a spin‐off without stating a reason experience significant deterioration in industry‐adjusted operating performance in the three years following the withdrawal. These results indicate the market can anticipate the viability of withdrawn spin‐offs at the time of the initial announcement. JEL classification: G34

This paper examines the wealth effects associated with unregistered private common stock placements under the Regulation D exemption by a sample of exchange listed and over the counter firms. Unlike the negative abnormal returns associated with public equity offerings, private placements of common stocks under Regulation D are initially associated with significantly positive abnormal returns. However, these firms experience significant negative price effects in the two years following the private placements.

Summarizes the main hypotheses used in previous research on dividend policy and reports a study of patterns in dividend payouts/growth using neural networks as a data mining technique. Discusses the properties of neural networks, recognizes that they are unsuitable for hypothesis testing and uses sensitivity analysis on 1992‐1997 data from 201 US firms. Presents the results, which do not outperform a previous model based on factor analysis, finds no significant nonlinear relationship in the data; but shows that dividend variability is sensitive to input variables, especially dividend growth.