Beyond the Split: A Meta-Analysis of Market Reactions to Stock Splits in Emerging Economies

Stock splits, Market efficiency, Emerging economies, Event study, Meta-analysis

This meta-analysis examines market reactions to stock splits in emerging economies, evaluating the semi-strong form of the Efficient Market Hypothesis (EMH) and the signaling versus liquidity effects of such corporate actions. Using a structured meta-analytic approach, we synthesize findings from ten empirical studies on stock splits in markets like India, employing event study methodologies to assess abnormal returns (ARs), cumulative abnormal returns (CARs), and publication bias. The results reveal short-term positive abnormal returns around split announcements, supporting the signaling hypothesis, but long-term reversals suggest transient liquidity benefits. While partial market efficiency is observed, pre-event abnormal returns indicate information leakage or investor overreaction. The study contributes by consolidating fragmented evidence, highlighting behavioral and structural inefficiencies in emerging markets. Key limitations include potential publication bias and geographic concentration on India.