Intra-industry reactions to stock split announcements

Oranee Tawatnuntachai, Ranjan D'Mello

Research output: Contribution to journalArticlepeer-review

18 Scopus citations


We examine whether favorable information conveyed by stock split announcements transfers to nonsplitting firms within the same industry. On average, nonsplitting firms' shareholders experience positive and significant abnormal returns at the stock split announcements of their industry counterparts. In addition, industrywide and firm-specific characteristics are important determinants in explaining nonsplitting firms' stock returns. These firms' earnings increase significantly, and the earnings changes are positively related to the stock price reactions. Finally, we find no evidence that investors revise the value of nonsplitting firms because they anticipate a decline in earnings volatility.

Original languageEnglish (US)
Pages (from-to)39-57
Number of pages19
JournalJournal of Financial Research
Issue number1
StatePublished - Mar 2002

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance


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