The impact of dividend tax changes on the performance of Malaysian REITs

This is the first empirical research examining the effects of dividend taxes on the performance of real estate investment trusts (REITs) in Malaysia. The Malaysian government’s announcement of remissions of dividend tax for the REIT sector under the 2007, 2009 and 2011 budgets, provide an excellent...

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Main Author:	Lee, Thean Leong
Format:	Thesis
Language:	eng eng
Published:	2015
Subjects:	HJ Public Finance
Online Access:	https://etd.uum.edu.my/4917/1/s815010.pdf https://etd.uum.edu.my/4917/2/s815010_abstract.pdf
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id	my-uum-etd.4917
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Wong, Woei Chyuan
topic	HJ Public Finance
spellingShingle	HJ Public Finance Lee, Thean Leong The impact of dividend tax changes on the performance of Malaysian REITs
description	This is the first empirical research examining the effects of dividend taxes on the performance of real estate investment trusts (REITs) in Malaysia. The Malaysian government’s announcement of remissions of dividend tax for the REIT sector under the 2007, 2009 and 2011 budgets, provide an excellent but rare opportunity to examine the impact of taxation on stock price performance and stock liquidity. It can be concluded that dividend tax cut announcements made in 2006 and 2008 resulted in a positive stock price reaction from the stock market. The cumulative average abnormal returns (CAARs) are significant at the 10% level across the three event windows. The CAARs for dividend tax remission announced in 2011, on the other hand, are not significantly different from zero. These results support the hypothesis that the announcement of dividend tax reductions increases the wealth of REITs because tax is a form of transaction cost. The insignificance of third announcement CAARs could possible due to lack of new information as it merely extended the dividend tax benefits for another 4 years until 2016. It is also verified that there were no evidence to support the hypothesis that dividend tax cuts will increase the liquidity of REIT shares as proxied by shares trading volume
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Lee, Thean Leong
author_facet	Lee, Thean Leong
author_sort	Lee, Thean Leong
title	The impact of dividend tax changes on the performance of Malaysian REITs
title_short	The impact of dividend tax changes on the performance of Malaysian REITs
title_full	The impact of dividend tax changes on the performance of Malaysian REITs
title_fullStr	The impact of dividend tax changes on the performance of Malaysian REITs
title_full_unstemmed	The impact of dividend tax changes on the performance of Malaysian REITs
title_sort	impact of dividend tax changes on the performance of malaysian reits
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2015
url	https://etd.uum.edu.my/4917/1/s815010.pdf https://etd.uum.edu.my/4917/2/s815010_abstract.pdf
_version_	1747827828225736704
spelling	my-uum-etd.49172021-03-18T08:30:44Z The impact of dividend tax changes on the performance of Malaysian REITs 2015 Lee, Thean Leong Wong, Woei Chyuan Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HJ Public Finance This is the first empirical research examining the effects of dividend taxes on the performance of real estate investment trusts (REITs) in Malaysia. The Malaysian government’s announcement of remissions of dividend tax for the REIT sector under the 2007, 2009 and 2011 budgets, provide an excellent but rare opportunity to examine the impact of taxation on stock price performance and stock liquidity. It can be concluded that dividend tax cut announcements made in 2006 and 2008 resulted in a positive stock price reaction from the stock market. The cumulative average abnormal returns (CAARs) are significant at the 10% level across the three event windows. The CAARs for dividend tax remission announced in 2011, on the other hand, are not significantly different from zero. These results support the hypothesis that the announcement of dividend tax reductions increases the wealth of REITs because tax is a form of transaction cost. The insignificance of third announcement CAARs could possible due to lack of new information as it merely extended the dividend tax benefits for another 4 years until 2016. It is also verified that there were no evidence to support the hypothesis that dividend tax cuts will increase the liquidity of REIT shares as proxied by shares trading volume 2015 Thesis https://etd.uum.edu.my/4917/ https://etd.uum.edu.my/4917/1/s815010.pdf text eng public https://etd.uum.edu.my/4917/2/s815010_abstract.pdf text eng public masters masters Universiti Utara Malaysia Ane, T., & Ureche-Rangau, L. (2008). Does trading volume really explain stock returns volatility? 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The impact of dividend tax changes on the performance of Malaysian REITs

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