Attention Hypothesis (Grinblatt, Masulis and Titman) suggests that managers use stock dividends to attract attention from the professional analysts to revalue their future cash flows.
signaling hypothesis, trading range hypothesis, liquidity hypothesis, tax-timing, cash substitution hypothesis, attention hypothesis and retained earning hypothesis.
The maximum agreement and support is for attention hypothesis, followed by signaling hypothesis and trading range hypothesis.
Hence, the Media Attention Hypothesis is as follows:
The results are displayed in Table V and provide strong support for the Media Attention Hypothesis (Hypothesis 1).
Overall, the results reported in this section document a positive relation between bidder CARs and the target's media exposure, thus supporting the Media Attention Hypothesis.
As far as the divided attention hypothesis
is concerned, it might be supposed that attention is a general cognitive resource, the amount of which is limited, and that can be divided between the different chunks of information to be processed (Anderson, 1993; Lovett, Reder, & Lebiere, 1999).
To summarize, the heightened attention hypothesis derived from Ackerman's theory and, to a lesser degree, from realignment theory makes two major predictions:
On the other hand, confirmation of the prediction would be quite strong evidence in favor of the heightened attention hypothesis.
The former notion corresponds to the contingent allocation of attention hypothesis
, where all AC effects are modulated by top down factors; whereas the latter stresses the automaticity of AC in its very beginning.
These results are consistent with Merton's attention hypothesis.
The next section summarizes the results of previous studies of changes in the roster of the Standard and Poor's Index of 500 Common Stocks (S&P 500) and presents Merton's attention hypothesis as an alternative to the price pressure hypothesis.