Review of Quantitative Finance and Accounting

, Volume 44, Issue 3, pp 493–511 | Cite as

Do dividends signal future earnings in the Nordic stock markets?

  • Eva Liljeblom
  • Sabur Mollah
  • Patrik Rotter
Original Research


We study the informational content of dividends on three Nordic civil law markets, where other simultaneous but blurring motives for dividends may be weaker. Using aggregate data on real earnings per share and payout ratios, long time series from 1969 to 2010, and methodologies which address problems of endogeneity, non-stationarity and autocorrelation (including a vector error correction model approach), we find evidence on dividend signaling in Nordic markets. However, we also find heterogeneity in the relationship between dividends and earnings on markets similar in many respects, suggesting that even small variations in the institutional surroundings may be important for the results.


Dividend signaling Information content Nordic markets Vector error correction model (VECM) 

JEL Classification

G35 G15 C32 C58 



We thank Mats Nyman, Investment Strategist at Handelsbanken Capital Markets for data support. We thank Mark Shackleton and other participants at 48th BAFA meeting, 17–19 April, 2012, UK. We are also thankful to the discussants and participants at the 49th BAFA meeting, 9–11, April, 2013, Newcastle, UK, the 20th Global Finance Conference, 20–22 May, 2013, Monterey Bay, California, USA, and the World Finance Conference, 1–3 July, 2013, Limassol, Cyprus, for valuable comments. We are grateful to the Editor and an anonymous referee for valuable comments.


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Hanken School of EconomicsHelsinkiFinland
  2. 2.School of BusinessStockholm UniversityStockholmSweden
  3. 3.EF Education First LtdLuzernSwitzerland

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