The Effect of Loss and Gain Firms’ Dividend Payout on Trading Volum

This study examines the effects of dividend payments on trading volume of loss and gain firms. In this study, three hypotheses were established and empirical analysis was conducted. The results of studying 5,963 firms (firms - years) listed on the securities market in 2002-2013 are as follows. The trading volume of a loss firm that does not pay dividends is higher than the trading volume of a gain firm that does not. The trading volume of a loss firm that does not pay dividends is higher than the trading volume of a loss firm that provides dividends. The results of this study suggest that firms that pay dividends, even if they are loss firms, are experiencing high earnings quality, which reduces trust among investors. However, the analysis of only the firms paying dividends showed no relationship between loss and trading volume. In other words, if the sample is limited to firms that pay dividends, the loss is unrelated to the trading volume. In this sense, this study contributes to the profitability of individual firms in analyzing the information effect of dividends. This study also adds to what is known about using trading volume for information effect.