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Control-ownership disparity and stock market Predictability: Evidence from Korean chaebols

Denis Yongmin Joe, Frederick Dongchuhl Oh and Cheolbeom Park ()

Finance Research Letters, 2018, vol. 27, issue C, 6-11

Abstract: We use Korean firm-level data to examine whether the predictive ability of log dividend yields depends on the disparity between control and ownership rights. We find that dividend growth predictability via the log dividend yield grows as the disparity between control and ownership rights increases. However, we find that log dividend yields have no significant predictive power for stock returns. Our results are generally consistent with the US firm-level results in Vuolteenaho (2002) and provide a further explanation of why the predictability of log dividend yields for dividend growth differs across firms.

Keywords: Control-ownership disparity; Dividend yield; Dividend growth predictability; Stock return predictability (search for similar items in EconPapers)
JEL-codes: G12 G15 G32 G34 (search for similar items in EconPapers)
Date: 2018
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