Stock dividend ex-day effect and market microstructure in a unique environment

Research output: Contribution to journalArticle

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Abstract

This paper examines the stock dividend ex-day effect on the Muscat Securities Market (MSM), which is of interest because several of the market microstructure explanations for the ex-day effect can be ruled out. We find that there are positive abnormal returns on Omani stock dividend ex-days. We also find that firms distributing stock dividends have higher stock prices than firms that are in the same industries but do not distribute stock dividends. In addition, we find that the positive abnormal returns are positively related to stock price increases in the pre-announcement period and to stock dividend percentages. This evidence suggests that stock dividends in Oman might be used to reduce stock prices.

Original languageEnglish
Pages (from-to)71-79
Number of pages9
JournalInternational Economics
Volume139
DOIs
Publication statusPublished - 2014

Fingerprint

Market microstructure
Stock dividends
Stock prices
Abnormal returns
Industry
Preannouncements
Securities market
Oman

Keywords

  • Bid-ask effect
  • Market microstructure
  • Stock dividends

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics, Econometrics and Finance(all)

Cite this

Stock dividend ex-day effect and market microstructure in a unique environment. / Al-Yahyaee, Khamis Hamed.

In: International Economics, Vol. 139, 2014, p. 71-79.

Research output: Contribution to journalArticle

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