Global Advanced Research Journal of Management and Business Studies (GARJMBS) ISSN: 2315-5086 November 2014 Vol. 3(11), pp 522-528

Copyright © 2014 Global Advanced Research Journals   

 

Original Research Articles

Stock splits and stock dividends: implications for bid ask spread components

 Dr Wissem Daadaa

University of Carthage Tunisia

Email: Wissem.daadaa@yahoo.fr

Accepted 02 September 2014

 

Abstract

Recent theoretical researches in equity market consider that the enhanced liquidity is the principal motivation for stock splits and stock dividends, however, empirical studies find different results and even a decline in liquidity after the announcements or the effectives dates (ex dates) of theses events. In this paper, we analyze the stock splits and stock dividends effects on liquidity using bid ask spread measures.  The sample is composed of all the stock splits and stock dividends announcements on Tunisia Stock Exchange (TSE), between 1990 and 2010.  We test the change of the various indicators liquidity before the announcement period, between the announcement and the ex date, and after the ex date. The results show an increase in the absolute and relative spread after the ex date of stock splits.  This increase in the spread involves an increase in the investor transaction cost, a degradation of the short-term liquidity and the fall of the market quality.  This increase is explained by order processing costs and inventory holding costs.

Keywords: Stock, Dividends, Stock Market.  

Related Articles


Original Research Articles
Anjoga Humphrey and Kituyi G Mayoka
A Framework for Usability of e-Government Services in Developing Countries
Glo. Adv. Res. J. Manage. Bus. Stud. September 2016 Vol: 5(1): - [Abstract] [Full Text - PDF] (241 KB)
Ramiro Enrique Cepeda Luna, Gabriel Arturo Pazmiño Solys, Washington Marcelo Gallardo Medina, Juan Enrique Ramos Guevara, Mónica Paulina Espinoza Guano and Luis Leonardo Guerrero Garcés
Cleaner production and the management of effluents in the Ecuadorian craft fisheries sector
Glo. Adv. Res. J. Manage. Bus. Stud. June 2017 Vol: 6(4): - [Abstract] [Full Text - PDF] (135 KB)
Reviews
Marcelo Porto, Kazuo Kawano Nagamine, Antonio Carlos Brandão, Dorotéia Rossi Silva Souza and Cassiano Merussi Neiva
Updating on resistance training for prepubertal obese children: Resistance training for obese children
Glo. Adv. Res. J. Manage. Bus. Stud. December 2012 Vol: 1(11): - [Abstract] [Full Text - PDF] (205 KB)
Ahmad Mashal
Framework for Microfinance Sector in the Arab Countries
Glo. Adv. Res. J. Manage. Bus. Stud. February 2016 Vol: 5(2): - [Abstract] [Full Text - PDF] (144 KB)
Original Research Article
Getulio Akabane K, José Manoel Souza das Neves, Roberto Kanaane, Rogerio Gianeze
Consumers Needs Assessment of Cutting Tools Against Suppliers
Glo. Adv. Res. J. Manage. Bus. Stud. April 2014 Vol: 3(4): - [Abstract] [Full Text - PDF] (364 KB)
Review
Rodrigo Garcia Schwarz
A new approach to fundamental social rights: social rights, democracy and citizenship
Glo. Adv. Res. J. Manage. Bus. Stud. December 2015 Vol: 4(2): - [Abstract] [Full Text - PDF] (334 KB)

Current Issue

Viewing Options

View Full Article - PDF
Download Full Article - PDF

Search for Articles

Wissem Daadaa on Google Scholar
Wissem Daadaa on Pubmed

Statistics

Viewed 1975
Printed 392
Downloaded 591
Powered By iPortal Works