Propensity to pay dividends and CEO reputation

Danai Likitratcharoen, Pornsit Jiraporn, Tatchawan Kanitpong

Research output: Contribution to journalArticlepeer-review


Over the past decades, there have been numerous discussions about the influence of dividends and firm's value. If dividends have an influence on the firm's value, then it is worth exploring the factors that have an influence on dividends. The purpose of this research is to test the association between firm's propensity to pay dividends and firm's CEO reputation while controlling for firm size, market-to-book ratio, leverage, R&D spending, capital expenditures, CEO tenure, year dummies, and industry dummies. Press coverage (media counts) are used to proxy for CEO reputation. The results from logistic regression show that firms with higher reputable CEOs have lower propensity to pay dividends. These results support the investment hypothesis that CEOs with higher reputation tend to be more aggressive and use the funds to make more investment rather than paying out dividends. These results are important because they show that a managerspecific attribute, i.e. reputation, has a significant impact on a crucial corporate outcome - the extent of corporate dividend payouts.

Original languageEnglish (US)
Pages (from-to)82-88
Number of pages7
JournalEuropean Journal of Scientific Research
Issue number1
StatePublished - Jul 2012

All Science Journal Classification (ASJC) codes

  • General Computer Science
  • General Mathematics
  • General Materials Science
  • General Agricultural and Biological Sciences
  • General Engineering
  • General Earth and Planetary Sciences


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