A stock doesn't always go up when it announces a dividend increase, however when it does it can be good or bad depending on the situation.
When a company can increase its dividend regularly it is usually a good sign the company is profitable, and well managed. Yes you could say there is less money for the company to invest. A good company makes more money than it knows what to do with, and giving it out to shareholders is not the worst thing in the world.
A well manged company will typically try to keep its dividend to some percent of its profit, when your profits grow you can pay out more but relatively its not that different for the company. Lets put some numbers to this.
Assuming a company has $1.00 earnings per share in 2017, and pays out $0.20 per share as its dividend. The company is paying out 20% of its profits. It keeps 80% to reinvest. That is $0.80 per share. If they have a million shares outstanding that is $800,000 to work with.
Next year the company hits a home run and earns $2.00 per share. Now it can pay $0.40 per share. It is still only paying out 20% of earnings. so it still has 80% for research and development. But this time 80% is $1.60 per share, instead of $0.80 per share. Assuming they didn't buy back share, now they have $1.6 million to reinvest into the company.
If the company lacks any suitable reinvestment they may pay out more of the profits so the shareholders have a chance to invest that money on their own. Until the company finds more reasonable options to increase their profits.