 Are investors' desires for dividend increases stronger than dividend initiation?Liliana Inggrit Wijaya, I. Made Narsa, Andry Irwanto and Rahmat Setiawan International Journal of Trade and Global Markets, 2021, vol. 14, issue 6, 559-579 Abstract: This study aims to explore whether information asymmetry premium (IAP) as the foundation of the investors' desire in the dividend increases decision is stronger than the dividend initiation decision. This study finds that IAP can significantly complement the dividend increases decisions and substitute dividend premium for dividend initiation. The results of the study support Li and Lie (2006) and Chazi et al. (2018), who fleshed out Baker and Wurgler (2004b). The findings of this study show that the investor's desire towards dividend increases reflects investor sentiment on dividends, explained through the level of information asymmetry between dividend payers and non-payers. Further analysis shows that irrational investor behaviour in expecting dividend increases to be paid continuously is significant compared to dividend initiation. This research contributes to behavioural finance research in bonding dividend catering incentives and dividend signaling theory. Keywords: dividend increases; dividend initiation; IAP; information asymmetry premium; dividend premium; investors' desire; behavioural finance; dividend catering incentives; dividend signaling theory. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijtrgm:v:14:y:2021:i:6:p:559-579 Access Statistics for this article More articles in International Journal of Trade and Global Markets from Inderscience Enterprises Ltd |
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