MARKET REACTION TO DIVIDEND INITIATION ANNOUNCEMENTS ON THE GHANA STOCK EXCHANGE: THE CASE OF INDUSTRIAL ANALYSIS

Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 4

Abstract

This study examines the market?s reaction to dividend initiation announcements. In particular, it considered the magnitude of abnormal returns during the days that surround announcements of dividend initiation. This study expects to reveal whether dividend initiation is important to investors on the Ghana Stock Exchange. It also expects to reveal whether the type of firm?s industry has influence on the investors? investment decision. This is accomplished by measuring the abnormal returns before, during and after dividend initiation announcements. Using an event study approach, the evidence shows that dividend initiation announcements are greeted positively by investors. Industry based analysis is made to ascertain if firms in different industries react differently to dividend initiation announcement. The industries included: manufacturing, financial service and the other industries. The results suggest that firms in the manufacturing industry experience stronger investors? reaction than firms in the other industries.

Authors and Affiliations

Yakubu Awudu Sare| Department of Banking and Finance, School of Business and Law, University for Development Studies, Wa-Ghana, Seyram Pearl-Kumah| Department of Banking and Finance, Ghana Baptist University College, PMB, Kumasi- Ghana, Andrews Salakpi| Department of Accountancy, School of Business and Law, University for Development Studies, Wa-Ghana

Keywords

Related Articles

FACTORS DETERMINING RESIDENTIAL RENTAL PRICES

Due to the high demand for residential apartments, landlords take undue advantage of tenants and increase rent without adhering to rent regulations. A high proportion of the population in Ghana rents than own homes becau...

Exports and Nigerian’s Economic Growth: a Co-Integration Analysis

This research work employed the use of cointegration analysis in the study of export and economic growth in Nigeria. It was embarked on, in order to determine whether there is bi-directional relationship between exports...

THE PATH DEPENDENCE OF INDUSTRY STRUCTURE ADJUSTMENT IN CHONGQING: CENTRAL GOVERNMENT POLITICAL DECISION

Reviewing Chongqing’s industrial structure evolution in the history view angle since Chongqing was opened and quantitative analyzing with shift-share analysis and Structure effect index after the Reform and Openness, thi...

THE VOLATILITY STRUCTURE OF GLOBAL FINANCIAL MARKETS: A COMPARATIVE ANALYSIS

The study is basically an extension of the k-day Vol ratio analysis on Nifty Index, proposed by Viswanathan and Maheswaran (2016). It examines the impact of the global financial crisis of 2008 on the structure of volatil...

Economic Freedom Verses Economic Growth: Cross Countries Analysis in the form of ARDL Approach

The generous theoretical and empirical debates are available on institutionalfreedom and economic growth, but unsuccessful to facilitate stationaryconclusion regarding the nature of connection. It is still confusing that...

Download PDF file
  • EP ID EP2020
  • DOI -
  • Views 415
  • Downloads 52

How To Cite

Yakubu Awudu Sare, Seyram Pearl-Kumah, Andrews Salakpi (2014). MARKET REACTION TO DIVIDEND INITIATION ANNOUNCEMENTS ON THE GHANA STOCK EXCHANGE: THE CASE OF INDUSTRIAL ANALYSIS. Asian Economic and Financial Review, 4(4), 440-450. https://europub.co.uk/articles/-A-2020