Does entrenchment of managers affect entrepreneurial dividend decision and investor sentiment?

Abstract

Purpose The purpose of this paper is to observe whether the entrenchment of managers can affect firms’ dividend disbursement decisions and investor sentiment in Tunisia context. Design/methodology/approach The sample includes all non-financial listed stocks in Tunisia stock exchange during the years 2004–2017. Moreover, the entrenchment of managers is measured by five proxy explained the managers rooting from all listed firms. The propensity to pay dividends is measured by the dividend yield. Findings The findings yield qualitatively consistent with the previous research. After controlling for the effect of manager’s behavior and different entrenchment phase, the result shows that entrepreneurial the firm’s decision to pay dividends could be influenced by the managers’ entrenchment. Research limitations/implications The result is limited at the level of the non-financial companies listed in the BVMT, but in the future studies, the investigation with other countries can be compared. Practical implications Moreover, investors in Tunisia show their preference for a dividend to self-control and satisfaction and increase their profit, especially in an abnormal economic situation explained by the Tunisian politic crisis. Originality/value The originality of this paper is to investigate both the important role of the entrenchment and cycle life of the manager on the decision to distribute dividends and the investor sentiment. Moreover, the author’s problem may be a reference for future investigation talking about the managers’ psychology like opportunism.

Corporate Governance and Dividend Policy in the Banking Sector on the Indonesian Stock Exchange

“…Firth, Gao, Shen, & Zhang (2016) stated that paying larger dividends to shareholders reduced the scale of agency conflicts. Moreover, another function of agency control through dividend payments was alleviating the severity of conflict between managers and shareholders (See, Bilel, 2020). Therefore several studies explored the effects of corporate governance mechanisms on dividend policy (For example, Shamsabadi, Min, & Chung, 2016;Kulathunga, Weerasinghe, & Jayarathne, 2017;Atanassov & Mandell, 2018).…”

Corporate characteristics, audit quality and managerial entrenchment during the COVID-19 crisis: evidence from an emerging country

“…The selection of controls is in line with previous studies studying the ME. We included the following firm indicators:Firm size (SIZE) was measured by taking the natural log of total assets; one of the most frequently used measures for firm size (Dah et al. , 2020; Marouan, 2015; Bilel, 2020; Dakhli, 2021a, b, c).…”

“…Firm size (SIZE) was measured by taking the natural log of total assets; one of the most frequently used measures for firm size (Dah et al. , 2020; Marouan, 2015; Bilel, 2020; Dakhli, 2021a, b, c).…”

“…Managerial entrenchment (ME) has attracted a growing attention in the recent research literature (Antounian et al, 2021;Bilel, 2020;Dah et al, 2020;Di Meo et al, 2017;Gana-Oueslati and Labaronne, 2011;Guthrie, 2021;Marouan, 2015;Salehi and Arianpoor, 2021). ME is commonly defined as a strategy pursued by managers to make their presence within the firm irreplaceable and maximize their own interests at the expense of the legitimate of the company's owners, through opportunistic behavior (Hachana and Khemiri, 2016;Kachouri et al, 2020;Ji et al, 2019).…”

“…, 2021). Emerging countries are marked by a weak institutional setting offering a limited legal protection to the shareholders (Bilel, 2020; Qawqzeh et al , 2021) and a poor corporate governance structure that is unable to monitor the conduct of managers and protect the rights of shareholders (Tahir et al. , 2020).…”