Flavin, Thomas and O'Connor, Thomas G. (2017) Reputation building and the lifecycle model of dividends. Working Paper. Department of Economics, Finance & Accounting: Working Paper N281-17. (Unpublished)

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Abstract

We analyse 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 reputation-building behaviour, not just in the early stages of their lifecycle but also in the mature stage.

Item Type:	Monograph (Working Paper)
Keywords:	Dividend payout; lifecycle; retained equity; contributed equity; firm age;
Academic Unit:	Faculty of Social Sciences > Economics, Finance and Accounting
Item ID:	8416
Depositing User:	Ms Sandra Doherty
Date Deposited:	06 Jul 2017 15:14
Publisher:	Department of Economics, Finance & Accounting: Working Paper N281-17
URI:
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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