Speaker: | Shiyang Huang |
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Speaker Intro: |
Dr. Shiyang HUANG received his Ph.D. degree in finance from the London School of Economics in 2015. He also holds a master degree and a bachelor degree in economics from Tsinghua University. He joined The University of Hong Kong in 2015. |
Host: | |
Description: |
We propose a stock-level measure of dividend demand based on the “dividend pay day effect.” We first show that there exists a price pressure on dividend pay day, and such price pressure completely reverts after the dividend pay day. To justify that the dividend pay day effect captures investors’ demand for dividends, we conduct two tests and find: (1) young investors are more likely to reinvest their dividends on dividend-paying stocks; (2) stocks more heavily held by mutual funds in 401K retirement accounts experience a larger price pressure on dividend payment days. Based on our stock-level measure of dividend demand, we draw two implications. First, we find that the dividend pay day effect can significantly and negatively predict corporate dividend payouts. This effect is weaker when firm managers are more overconfident, suggesting that firms have a dividend catering behavior. Second, consistent with “reaching for dividends,” the dividend pay day effect is stronger when interest rates are higher. We use the COVID-19 pandemic to pin down the causal link between interest rates and the dividend pay day effect. The impact of interest rates on the dividend pay day effect suggests that monetary policy affects financial markets through the price pressure on dividend payments. |
Time: | 2021-05-11(Tuesday)16:40-18:00 |
Venue: | Room N302, Economics Building |
Organizer: | 太阳成tyc7111cc、王亚南经济研究院 |