Navigating Dividend Decisions: The Impact of Outsider CEOs in Imputation Tax Environments

Ariful Hoque (), Md Rayhan Islam and Shahadat Hossain
Additional contact information
Ariful Hoque: Murdoch Business School, Murdoch University, Perth, WA 6150, Australia
Md Rayhan Islam: Murdoch Business School, Murdoch University, Perth, WA 6150, Australia
Shahadat Hossain: Department of Finance, University of Chittagong, Chittagong 4331, Bangladesh

Risks, 2024, vol. 12, issue 11, 1-30

Abstract: This study examines the influence of outsider CEOs on corporate dividend policies, specifically within the framework of an imputation tax environment, like in Australia. The study analyses 9826 firm-year observations from Australian firms listed on the ASX from 2012 to 2021. The study reveals that outsider CEOs tend to distribute lower dividend payouts; a trend observed even after robustness tests. Methodologically, the study addresses potential endogeneity issues through sophisticated methods like propensity score matching, difference-in-difference approach, and two-stage system generalized method of moments. The findings indicate that firms led by outsider CEOs, particularly those with specialized industry knowledge, are more inclined to invest undistributed profits in capital expenditure projects, reflecting an investment-oriented strategy. This research contributes significantly to understanding the strategic decision-making of outsider CEOs and their impact on dividend policies in specific tax environments.

Keywords: outsider CEOs; dividend policy; imputation tax; corporate governance; Australian market; CEO appointment (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-9091/12/11/182/pdf (application/pdf)
https://www.mdpi.com/2227-9091/12/11/182/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:12:y:2024:i:11:p:182-:d:1524485

Access Statistics for this article

Risks is currently edited by Mr. Claude Zhang

More articles in Risks from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().