拉斯维加斯9888

Finance Seminar（2014-13）

Topic:Stock Liquidity and Dividend Policy, Evidence from a Natural Experiment

Speaker:Meijun Qian, NUS Business School

Time:Wednesday, 21 May, 10:00-11:30

Location:Room 217, Guanghua Building 2

Abstract：Using a natural experiment that introduces exogenous shock to stock liquidity, we examine the impact of liquidity on dividend policy. The difference-in-difference tests show that firms reduce dividend payments significantly when liquidity increases. Moreover, the difference-in-difference-in-difference (DDD) tests show that the reduction is greater for firms with greater post-event liquidity and greater shareholder cash demand. Finally, shareholders of firms that pay more dividends in pre-event period are more likely to divest shares in the immediate post-even period. Our results are robust to potential timing discretion and other effect accompanied with the reform.