This study aims to analyze the effects of dividend payments by loss-reporting firms and profit-reporting firms on trading volume. Based on the premise that the information effect of dividends would differ depending on individual firms' profitability, the study established three hypotheses and conducted empirical analyses. Prior research on trading volume has reported that higher earnings quality reduces differing beliefs among investors regarding the firms they invest in. Meanwhile, accounting research on dividends has shown that dividend-paying firms report higher earnings quality than non-dividend-paying firms. However, a series of prior studies on dividends have analyzed the information effect of dividends without considering the profitability of individual firms, which constitutes the source of dividend payments. In this regard, the present study empirically analyzed the information effect of dividends by taking individual firms' profitability into consideration. Specifically, this study examined the effects of dividend payments by loss-reporting and profit-reporting firms on trading volume. The analysis of 5,963 firm-year observations listed on the Korea Exchange (KRX) during the 2002–2013 period yielded the following results. First, the trading volume of non-dividend-paying loss firms was found to be higher than that of non-dividend-paying profit firms. Second, the trading volume of non-dividend-paying loss firms was found to be higher than that of dividend-paying loss firms. These results remained consistent even when the sample was reconstituted and reanalyzed. When analyzing only dividend-paying firms, no significant relationship was found between loss status and trading volume. This can be interpreted as indicating that, for dividend-paying firms, whether they report a loss or profit is not associated with trading volume. Taken together, these results suggest that even among loss-reporting firms, those that pay dividends have higher earnings quality, thereby reducing differing beliefs among investors regarding the firms they invest in. Prior studies analyzing the signaling effect of dividends have examined the signaling (information) effect without considering the profitability of individual firms as the source of dividend payments. In this respect, this study contributes by considering individual firms' profitability in analyzing the information effect of dividends. In particular, this study makes a contribution by using trading volume rather than price to analyze information effects.