An Examination of the Signaling Effect of the Dividend Policy on Synchronization of Stock Returns

Document Type : Original Article

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Arab Academy for Science Technology and Maritime Transport Graduate School of Business

Abstract

The paper examines the signaling effect of Dividend Policy for the non-financial firm that are listed in Egypt Stock Exchange. The data cover the years 1998 to 2022 annually. The signaling effect uses the synchronization of stock returns. The analysis of this paper examines the Dividend Policy that affect synchronization of stock returns.
Model 1 shows that for dividend information ratios, the results indicate that only Dividend Yield is found statistically significant and negative with synchronization of stock returns.
Moreover, for model 2, the analysis shows that firm size has great effect on the synchronization of stock returns. The firms’ size is examined through dummy variable using the natural log of total assets. The results indicate that corporate size has significant and positive effects on stock return synchronization.
As for the effects of types of industries (Model 3), the results show that  industry type have no effect on the synchronization of stock returns, since none of 16 industries are statistically significant with the synchronization of stock returns.

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