Flavin, Thomas and O'Connor, Thomas (2017) Reputation building and the lifecycle model of dividends. Pacific-Basin Finance Journal, 46. pp. 177-190. ISSN 0927-538X

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Abstract

We analyze the relationship between corporate dividend policy and firm lifecycle in a low-disclosure regime, where domestic firms have an incentive to use dividends to build capital market reputation among external investors. We use a range of lifecycle indicators from the extant literature and find that, as predicted by the lifecycle model, dividend payouts increase along the lifecycle until peaking in the mature stage. Furthermore, dividends are positively related to growth opportunities. In all lifecycle stages, firms with relatively larger growth opportunities pay relatively larger dividends. We find that firms in low-disclosure regimes, engage in reputationbuilding behaviour, not just in the early stages of their lifecycle but also in the mature stage.

Item Type:	Article
Keywords:	Dividend payout; Lifecycle; Reputation building; Retained equity; Growth opportunities;
Academic Unit:	Faculty of Social Sciences > Economics, Finance and Accounting
Item ID:	11395
Identification Number:	https://doi.org/10.1016/j.pacfin.2017.09.006
Depositing User:	Thomas O'Connor
Date Deposited:	24 Oct 2019 16:52
Journal or Publication Title:	Pacific-Basin Finance Journal
Refereed:	Yes
URI:	Publisher

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