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Revisiting the corroboration effects of earnings and dividend announcements

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  • Louis T. W. Cheng
  • T. Y. Leung

Abstract

Using a unique market setting in Hong Kong, where (i) all firms release earnings and dividend information in the same announcement; (ii) corporate transparency is low; (iii) dividend income is non‐taxable and (iv) corporate ownership is highly concentrated, we re‐examine the corroboration effects of earnings and dividends. We use the control firm approach to avoid the return estimation bias resulting from observation clustering. We also add in variables and use econometric procedure to control for the potential impacts of earnings management, special dividends and heteroskedasticity. Our findings show that there exists a corroboration effect between the jointly announced signals.

Suggested Citation

  • Louis T. W. Cheng & T. Y. Leung, 2006. "Revisiting the corroboration effects of earnings and dividend announcements," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 46(2), pages 221-241, June.
    • Handle: RePEc:bla:acctfi:v:46:y:2006:i:2:p:221-241
    DOI: 10.1111/j.1467-629X.2006.00164.x
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    Cited by:

    1. Jeetendra Dangol, 2008. "Unanticipated Political Events and Stock Returns: An Event Study," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 20, pages 86-110, April.
    2. Warwick Anderson & Wen Kang, 2018. "The Relative Announcement Effects of Ordinary Dividends, Special Dividends and Share Buybacks in New Zealand," Working Papers in Economics 18/02, University of Canterbury, Department of Economics and Finance.
    3. Hiroyuki Ishikawa, 2011. "Empirical Analysis on the Dividend Life-Cycle Theory: Evidence from Japan," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 1, pages 39-60, December.
    4. Scott Walker, 2015. "Repeated Dividend Increases: A Collection of Four Essays," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 17, July-Dece.
    5. Dr. Jeetendra Dangol, 2016. "Nepalese Stock Market Efficiency in Respect of Cash and Stock Dividend Announcement," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 7(3), pages 60-71, September.

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