Sygnalizacja wyników finansowych w polityce dywidendowej na rynku NewConnect

Marek Pauka,Martyna Żyła

doi:10.17951/h.2017.51.6.301

Abstract

The aim of the paper was to give evidence whether changes of dividends could be considered as signals forecasting changes in future financial results. The sample consists of 42 companies listed on the NewConnect market in the years 2007–2016, paying regular dividends for at least 3 years. Using linear regression models, we show that dividend changes have a weak but positive effect on revenues changes, but they are insignificant when explaining changes in operating performance and net income. The paper fills a gap in empirical research on the Polish stock market, and especially the signalling function of dividends on NewConnect, which is characterised by a high degree of information asymmetry, has been examined for the first time.

Highlights

The aim of the paper is to examine whether changes in dividends may be treated as a signal from the managers about future performance of the company
We want to give evidence that in the market with high level of information asymmetry such as NewConnect (NC) payout policy may be interpreted as a tool for investors to build expectations about future financial results and it could be a way of limitation the agency costs
Main owners usually remain on the management boards and institutional investors hardly appear on the market

Summary

Introduction

The aim of the paper is to examine whether changes in dividends may be treated as a signal from the managers about future performance of the company. We want to give evidence that in the market with high level of information asymmetry such as NewConnect (NC) payout policy may be interpreted as a tool for investors to build expectations about future financial results and it could be a way of limitation the agency costs. According to the signalling theory, dividend payouts diminish information asymmetry and are perceived as signals sent to the market by managers. They can be regarded as a way of delivering information about the current and future situation. It is due to fear of consequences resulting from a potential reduction in dividend in case they would not be able to keep payouts on a higher level continuously

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