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- Title
Why are Stock Splits Declining?
- Authors
Minnick, Kristina; Raman, Kartik
- Abstract
The percentage of firms undertaking stock splits has fallen from a peak of 23% in 1982 to less than 1% in 2009. Controlling for time trends and other economic determinants, the declining incidence of stock splits is significantly associated with a drop in household investors ' equity holdings and with a rise in household income. We also report a decline in the size of split factors that is associated with an increase in institutional ownership of equity and with an increase in household income. Collectively, the evidence is consistent with firms responding rationally to changes in investor characteristics.
- Subjects
STOCK splitting; ECONOMIC impact; BUSINESS enterprises; INVESTORS; INCOME inequality; INSTITUTIONAL ownership (Stocks)
- Publication
Financial Management (Wiley-Blackwell), 2014, Vol 43, Issue 1, p29
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/fima.12024