Dileep R. Mehta, Edward A. Moses, Benoit Deschamps, Michael C. Walker, The Influence of Dividends, Growth, and Leverage on Share Prices in the Electric Utility Industry: An Econometric Study, The Journal of Financial and Quantitative Analysis, Vol. 15, No. 5 (Dec., 1980), pp. 1163-1196

Although several researchers have speculated that stock splits may affect the ownership structure of firms, there is very little empirical evidence available in this regard. We investigate a broad sample of stock splits by firms without confounding events, controlling for industry and size effects. Our results show that stock splits increase the numbers of both individual and institutional shareholders, and they do not affect the proportion of equity held by institutions. Further, changes in the numbers of individual and institutional shareholders are positively related to the split factor. Abnormal announcement returns are positively correlated with changes in the total number of shareholders. These findings support the signaling hypothesis.