Are investors' desires for dividend increases stronger than dividend initiation?

Wijaya, Liliana Inggrit and Narsa, I. Made and Irwanto, Andry and Setiawan, Rahmat (2021) Are investors' desires for dividend increases stronger than dividend initiation? International Journal of Trade and Global Markets, 14 (6). pp. 559-579. ISSN online 1742-755X; ISSN print 1742-7541

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Abstract

This study aims to explore whether information asymmetry premium (IAP) as the foundation of the investors' desire in the dividend increases decision is stronger than the dividend initiation decision. This study finds that IAP can significantly complement the dividend increases decisions and substitute dividend premium for dividend initiation. The results of the study support Li and Lie (2006) and Chazi et al. (2018), who fleshed out Baker and Wurgler (2004b). The findings of this study show that the investor's desire towards dividend increases reflects investor sentiment on dividends, explained through the level of information asymmetry between dividend payers and non-payers. Further analysis shows that irrational investor behaviour in expecting dividend increases to be paid continuously is significant compared to dividend initiation. This research contributes to behavioural finance research in bonding dividend catering incentives and dividend signaling theory.

Item Type:	Article
Uncontrolled Keywords:	dividend increases, dividend initiation, IAP, information asymmetry premium, dividend premium, investors' desire, behavioural finance, dividend catering incentives, dividend signaling theory
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:	Faculty of Business and Economic > Department of Management
Depositing User:	Ester Sri W. 196039
Date Deposited:	26 Nov 2021 03:10
Last Modified:	16 Mar 2022 08:43
URI:	http://repository.ubaya.ac.id/id/eprint/40756

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