Announcement effects of dividend tax cuts and corporate policies: evidence from Malaysia REITs

This study examines the effect of dividend tax changes on the share prices and corporate policies of Malaysian REITs. Event study results show that dividend tax cut announcements provide positive abnormal returns. Based on cross-sectional regression, the abnormal returns are found to be larger for R...

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Bibliographic Details
Published inPacific rim property research journal Vol. 23; no. 2; pp. 213 - 226
Main Authors Wong, Woei-Chyuan, Taufil Mohd, Kamarun Nisham, Hiau Abdullah, Nur Adiana
Format Journal Article
LanguageEnglish
Published Routledge 04.05.2017
Subjects
announcement effects
dividend policy
Dividend tax change
firm valuation
investment policy
Malaysia REIT
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Summary:This study examines the effect of dividend tax changes on the share prices and corporate policies of Malaysian REITs. Event study results show that dividend tax cut announcements provide positive abnormal returns. Based on cross-sectional regression, the abnormal returns are found to be larger for REITs with a higher retail ownership. The implementation of dividend tax cuts also increases dividend payout and reduce investment activities. These results partly support the traditional view of dividend taxation which posits that tax reform could affect economic efficiency and resource allocation in an economy.
ISSN:1444-5921
2201-6716
DOI:10.1080/14445921.2017.1303263