Do dividends signal future earnings in the Nordic stock markets?

Eva Liljeblom, Sabur Mollah () and Patrik Rotter ()

Review of Quantitative Finance and Accounting, 2015, vol. 44, issue 3, 493-511

Abstract: We study the informational content of dividends on three Nordic civil law markets, where other simultaneous but blurring motives for dividends may be weaker. Using aggregate data on real earnings per share and payout ratios, long time series from 1969 to 2010, and methodologies which address problems of endogeneity, non-stationarity and autocorrelation (including a vector error correction model approach), we find evidence on dividend signaling in Nordic markets. However, we also find heterogeneity in the relationship between dividends and earnings on markets similar in many respects, suggesting that even small variations in the institutional surroundings may be important for the results. Copyright Springer Science+Business Media New York 2015

Keywords: Dividend signaling; Information content; Nordic markets; Vector error correction model (VECM); G35; G15; C32; C58 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11156-013-0415-3

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