Do Dividends Signal Future Earnings in the Nordic Stock Markets?

Liljeblom, Eva; Mollah, Sabur; Rotter, Patrik

doi:10.2139/ssrn.2178925

Cited by 2 publications

(2 citation statements)

References 85 publications

(56 reference statements)

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“…These results are in line with the study conducted by Liljeblom et al (2015) on a sample of companies from Denmark, Norway, and Sweden, which have confirmed the informational content of dividends for Swedish companies only EPS has been used for measuring profits. Other studies exploiting the relationship between the current changes in the dividend and the future profits of companies in the Iranian and Malaysian markets have only partially confirmed the signaling hypothesis.…”

Section: Informational Content Of Dividends In the Polish Capital Marketsupporting

confidence: 91%

Are Emerging Markets Efficient? Evidence from Informational Content of Dividend Changes in Polish Stock Market

Snarska¹,

Tomasz²,

Zyguła³

2020

ERSJ

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Purpose: The objective of this paper is to present the dividend signaling hypothesis, in particular, an empirical analysis of the relationship between the current changes in the level of a dividend paid (t0) and the future profitability of the companies. Design/Methodology/Approach: The dividend signaling hypothesis is empirically tested using the dynamic causality analysis based on the regression approach monitoring for expected earnings changes and past returns with a set of linear and non-linear controls. The conducted analyses comprised the domestic companies quoted on the Warsaw Stock Exchange, which paid dividends in 2001-2016. Findings: The empirical results confirm that in the audited period, dividend decisions bring some information about the current situation (t = 0) and future (t = 1, t = 2) of the analyzed companies. It is also worth noting that among the analyzed indicators, the gross profit ratio (PBT) referred either to the market value or the book value of equity was most often in the statistically significant analyzes. In general, our results confirm the validity of the signaling hypothesis in the case of continuation-growth and initiation of payments in the Polish capital market as in the developed market. Practical Implications: We can say that investors, based on "signals" coming out of dividends advertisements, may conclude the future-income potential of a given company. Originality/value: As mentioned, the gross profit ratio (PBT) referred either to the market value or the book value of equity was most often in the statistically significant analyses. Thus, it seems that, contrary to the adopted assumptions in the literature, gross profit (PBT) in dividend signaling is more important than net profit (E).

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Section: Informational Content Of Dividends In the Polish Capital Marketsupporting

confidence: 91%

Are Emerging Markets Efficient? Evidence from Informational Content of Dividend Changes in Polish Stock Market

Snarska¹,

Tomasz²,

Zyguła³

2020

ERSJ

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show abstract

“…Commonly, the profitable firms distribute the earnings periodically through dividends to shareholders. Liljeblom, Mollah and Rotter (2013) state that, recently, most of dividend distributions contain important information which signals that firms have better future profits.…”

Section: Introductionmentioning

confidence: 99%

Profitability of Dividend Payers

Budiarso

2017

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Most of the firms are looking for profits as their main objective which make them develops strategies to get the target profit. In circumstances that firms get the target profit, then normally they shall distribute the earnings as dividends to shareholders. The objective of this study is to provide an empirical finding about profitability between firms namely higher dividend payers and lower dividend payers. This study uses data of listed firms in period of 2010 to 2016 which drawn from Indonesia Stock Exchange. This study uses 146 listed firms in period of 2010 to 2016 which gives 1022 as total observe data. In term of hypothesis testing, this study uses mean difference test. This study finds that firms with higher dividends have better profitability rather than the lower which means this study accepts the hypothesis that higher dividend payers have better profitability.

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Do Dividends Signal Future Earnings in the Nordic Stock Markets?

Cited by 2 publications

References 85 publications

Are Emerging Markets Efficient? Evidence from Informational Content of Dividend Changes in Polish Stock Market

Are Emerging Markets Efficient? Evidence from Informational Content of Dividend Changes in Polish Stock Market

Profitability of Dividend Payers

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