Entrenched CEO, Loss Aversion Behavior on Dividend Policy of Listed Firms in Thailand

Abstract

This study aims to investigate the dividend policy of listed firms in Thailand stock exchange market and fill the gap in academic literatures by integrating two sides: demand side (investors) and supply side (CEO) of dividends simultaneously. According to five years backward time series yearly data (2011 to 2015), the logit model in the current study can explain well on dividend policy. The findings are not only aligned with some theories in modern finance field, such as agency theory, life cycle theory, catering theory and managerial entrenchment hypothesis, but also complied with some theories in behavioural finance field, such as loss aversion, or risk aversion. Furthermore, the findings can be used by regulators to monitor the management of listed firms on the dividend provisions, and can also be used by institutional and individual investors to select firms to invest according to their risk preferences.