Privatization in Austria: Some theoretical reasons and performance measures

The issues of privatization (and sometimes deregulation) have been reviewed in a large literature on the various aspects of privatization, that has emphasized the potential efficiency gains. Hence, we provide some theoretical reasoning why privatization is useful as well as profitable for an economy and empirically present the extent of privatization in Austria and other European Union countries. In order to assess the impact of privatization in Austria on economic performance, we observe cash flows, the employment performance, and the stock-exchange ratings of the privatized formerly state-owned enterprises.Austria; Performance Measures; Privatization; Profitability; State-owned Enterprises

The Role of Firm-Specific Variables in Explaining Heterogeneous Stock Market Reactions to Dividend Announcements

The finance literature reports mixed results about the stock market reaction to dividend announcements. We try to explore that the heterogeneous stock market reaction to dividend announcements might be attributed to a number of firm-specific financial and non-financial factors. In this vein, we investigate the role of family ownership, firm size, leverage, dividend yield, market-to-book ratio, and firm growth in explaining the stock market reaction to dividend announcements. We use a sample of 206 dividend announcements of 136 firms listed at the Karachi Stock Exchange over the period of 2008 to 2012. Results of both the univariate and multiple regression analysis show that family ownership, firm size, and leverage negatively influence the stock market reaction to dividend announcements while dividend yield positively influences the stock market reaction to dividend announcements.

Stock Market Reaction to Dividend Announcement in Indonesian Listed Companies

This study aims to investigate the share price reaction to dividend announcement. It also examines whether or not the cumulative abnormal return (CAR) is affect to by control variables which is dividend change, earning change, dividend yield, normal trading volume, pre-cumulative abnormal return (PRECAR) and firm size). This study uses two methods to estimate the model. The first method is event study and the second method is Ordinary Least Square (OLS) regression. The sample firm utilized the event study and OLS regression are 415 and 243 companies respectively which are listed on the Indonesia Stock Exchange (IDX) during 2006 - 2010. The findings from the event study analysis indicate the share price reaction to dividend announcement is positive for dividend increase and negative for dividend decrease. The OLS regression result shows that the PRECAR variable is positive and significant while the other independent variables are insignificant

Share price reaction to earnings announcement on the JSE-ALtX: A test for market efficiency

Management has a duty to inform both shareholders and investorsabout the state of health of a firm. Earnings announcements providea yardstick that can be utilised by the market to assess the wealth andprofitability of a firm. The purpose of the study was to investigatewhether there are any significant abnormal returns around the publicannouncement of earnings and to establish whether the efficientcapital market hypothesis applies to the small ALtX market.16The study focused on all the companies listed on the JSE-ALtX thatannounced annual earnings between 1 January and 31 December2009. The method used for calculating the expected returns was theCapital Asset Pricing Model (CAPM).17Empirical evidence demonstrates that there is substantial negativeshare price reaction to earnings announcements on the smallALtX stock market. The ALtX also shows the weak form of marketefficiency. The study concluded that during a recessionary period,shareholders’ wealth is eroded in the small ALtX market; however,the weak form of market efficiency provides an opportunity forentrepreneurs and investors to exploit the market for profits whenthe market is performing well

Dividend Guidance to Manage Analyst Dividend Expectations

Using a sample of dividend payers from 12 European countries, we document that managers guide analyst dividend expectations to avoid reporting dividends below the consensus forecast. Specifically, we show that dividend guidance predicts (1) a substantial reduction in analyst dividend forecast optimism over the course of the fiscal year and (2) that a firm will meet or beat the consensus dividend forecast by a small margin. Managers guide analyst dividend expectations to avoid negative price reactions when reporting negative dividend surprises. Our results, which are robust to endogeneity and self-selection concerns and control for contemporaneous earnings guidance, highlight the important role dividend guidance plays in managing analyst dividend expectations

Signalling with dividends? new evidence from Europe

According to the dividend signalling hypothesis, dividend change announcements trigger share returns because they convey information about management’s assessment on firms’ future prospects. We analyse the classical assumptions of the dividend signalling hypothesis, using data from three European countries. The evidence gives no support to a positive relation between dividend change announcements and the market reaction for French firms, and only weak support for the Portuguese and UK firms. After accounting for non-linearity in the mean reversion process, the global results do not give support to the assumption that dividend change announcements are positively related with future earnings changes. We also formulate two hypotheses in order to explore the window dressing phenomenon and the maturity hypothesis, finding some evidence in favour of both, especially in the UK market

The effect of firm-specific factors on the market reaction to dividend change announcements: new evidence from Europe

The dividend policy is one of the most debated topics in the finance literature. According to the dividend signalling hypothesis, which has motivated a significant amount of theoretical and empirical research, dividend change announcements trigger share returns because they convey information about management’s assessment on firms’ future prospects. Consequently, a dividend increase (decrease) should be followed by an improvement (reduction) in a firm’s value. However, some studies have not supported the hypothesis of a positive relationship between dividend change announcements, and the subsequent share price reaction, such as the ones of Lang and Litzenberger (1989), Benartzi, Michaely and Thaler (1997), Chen, Firth and Gao (2002), Abeyratna and Power (2002) and Vieira (2005). Furthermore, some authors found evidence of a significant percentage of cases where share prices reactions are opposite to the dividend changes direction, like the works of Asquith and Mullins (1983), Benesh, Keown and Pinkerton (1984), Born, Mozer and Officer (1988), Dhillon and Johnson (1994) Healy, Hathorn and Kirch (1997), and, more recently, Vieira (2005). Consequently, we try to identify firm-specific factors that contribute in explaining the adverse market reaction to dividend change announcements. Globally, our evidence suggests that only for the UK sample we have firm-specific factors influencing the market reaction to dividend change announcements. We conclude that the UK firms with a negative market reaction to dividend increase announcements have, on average, higher size, lower earnings growth rate and lower debt to equity ratios

Polish stock market and some foreign markets – dependence analysis by copulas

By applying copulas the examination was carried out to find out whether trading volume, stock return and return volatility are pairwise dependent. In the investigations it was shown that there exists a close relationship between these variables on the domestic market and between Polish stock returns and the returns of foreign stock market indexes. A similar significant relationship concerns also trading volumes. In addition, stock returns (returns volatility) of the Austrian and especially of the German stock market influence Polish trading volume. The lack of significant DJIA returns impact on the trading volume on WSE on the same day is probably caused by the fact that changes of DJIA lead changes on the European stock markets.Copulas, dependences, stock returns, trading volume

Stock Returns Reaction to Dividend and Earnings Announcement: Which Event Provide More Predictive Information to Investor’s

The objective of this study is to reduce the uncertainty involved in firm’s future earnings performance by scrutinizing the impact of dividend and earnings announcement on stock returns by assembling data from the official website of Karachi Stock Exchange (KSE) over the period 2010-2014. The study employed event study methodology to examine the effect of dividend and earnings announcement on the stock returns around the 41-days event window of both pre and post announcement. The research results revealed that after the dividend announcement, stock prices move upward which is statistically significant and support the dividend signalling theory but in case of earnings announcement the persistent downward drift of stock prices in the post announcement period is observed which is statistically insignificant and offer some support for behavioral finance theory. Overall, the result confirmed that dividend announcement provide more predicative information than the earnings announcement around the firm’s future earnings performance. The study have implications for investors, policy makers and shareholders for their proper strategic decision making to uncovered the uncertainty about the firm’s future earnings performance. Keywords: Dividend Announcement; Earnings Announcement; Stock Returns; Signalling Effects; Event Study. JEL Classification: G35; G17; G32