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 Article
Basil U. Onwe
Effect of Corporate Social Responsibilities of Banks on Ebonyi State University
Glo. Adv. Res. J. Manage. Bus. Stud. December 2014 Vol: 3(12): - [Abstract] [Full Text - PDF] (299 KB)
Reviews
Made Antara and Made Sri Sumarniasih
Role of Bioscience and Biotechnology through Green Revolution to Increase the Rice Production in Indonesia
Glo. Adv. Res. J. Manage. Bus. Stud. July 2017 Vol: 6(7): - [Abstract] [Full Text - PDF] (250 KB)
Glenda C Velásquez-Serra
In relation to Epidemiologic and Entomologic Surveillance of Zika Virus
Glo. Adv. Res. J. Manage. Bus. Stud. January 2016 Vol: 5(1): - [Abstract] [Full Text - PDF] (99 KB)
Original Research Article
Syahirman Yusi
Existence of Internal and External Factors Implications to Small Scale Urban Business Performance Survey on Small Scale Agribusiness Enterprises in Palembang City Indonesia
Glo. Adv. Res. J. Manage. Bus. Stud. October 2015 Vol: 4(9): - [Abstract] [Full Text - PDF] (195 KB)
Review
OBC Nwankwo
Thinking globally and acting locally: Re-thinking MDGs strategies in the rural communities of Anambra State
Glo. Adv. Res. J. Manage. Bus. Stud. October 2012 Vol: 1(7): - [Abstract] [Full Text - PDF] (203 KB)
Original Research Article
P Kumaresan, N Dhahira Beevi R, Gururaj S, Vidyunmala MD, Senapati and SA Hiremath
(Bombyx mori L.) genotypes under stress environmental condition in hotspots
Glo. Adv. Res. J. Manage. Bus. Stud. April 2012 Vol: 1(2): - [Abstract] [Full Text - PDF] (0 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 3233
Printed 495
Downloaded 773
Powered By iPortal Works