Does stock ownership impact liquidity and dividends?
Does stock ownership impact liquidity and dividends?
Author(s): Ghaith El-NaderSubject(s): Economy, Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets, Accounting - Business Administration
Published by: ТОВ “Консалтингово-видавнича компанія “Ділові перспективи”
Keywords: stock ownership; liquidity; dividends; UK stock market;
Summary/Abstract: This study investigates the interactions among stock ownership, liquidity and dividends in the UK stock market over the period 2002–2016. Using different liquidity measures, it is shown that stocks with higher levels of free float (institutional ownership) are associated with higher (lower) levels of liquidity. In addition, a positive and significant relation is found between institutional ownership and dividend payout policy, which, as a result, highlights the comparative tax advantages that UK institutions have for dividend income. These relations hold even after controlling for firm-specific characteristics. Finally, a negative relation is found between dividends and liquidity, implying that investors with less (more) liquid stocks are more (less) likely to receive dividend payments.
Journal: Investment Management and Financial Innovations
- Issue Year: 15/2018
- Issue No: 3
- Page Range: 111-121
- Page Count: 11
- Language: English