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 the Tunisia context. Design/methodology/approach The sample includes all non-financial listed stocks in the 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 a 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 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 political 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.