Resumen de Evidence on the Irish stock market's reaction to dividend announcements

T. McCluskey, B.M. Burton, D.M. Power, C.D. Sinclair

• This study investigates the manner in which the Irish stock market responds to company announcements about dividend payments. In particular, the paper examines whether the predictions of the �signalling� hypothesis hold or if more recent findings (which suggest that there is little value-relevant information contained in dividend changes) better characterize the Irish market. Data were obtained for a sample of 50 companies whose shares were traded on the Dublin Stock Exchange from 1987 to 2001. Abnormal returns were then calculated for the whole sample and for various dividend�earnings change combinations. The results suggest that dividend announcements are important for Irish investors, but earnings signals appear to have a stronger impact on equity values.