The intra-industry impact of special dividend announcements: Contagion versus competition

This study examines the industry wide impact of special dividend announcements for a sample of Australian companies. With regard to the own-impact of announcers, industrial firms react significantly stronger than announcers of financial and resources firms. With regard to the cross-impact on non-announcers within the same sub-industry grouping, resources firms react positively while financial firms react negatively. No detectable price reaction was found for non-announcers of industrial non-financial firms. As such, evidence presented in this paper generally provides support for the 'contagion' hypothesis for resources firms and the 'competitive shift' hypothesis for financial firms.