The Impact of CEO decision horizon on Dividend Stickiness

Articles in Press

Document Type : Research Paper

Authors

1 Assistant Professor of Accounting, Faculty of Humanities, University of Jiroft, Iran

2 Assistant Professor, Department of Accounting, Faculty of Social Sciences, Economics, and Accounting, Razi University, Kermanshah, Iran

10.22059/ijms.2026.399384.677851

Abstract

This study examines the impact of CEOs’ decision-making horizons on dividend stickiness of firms. We test this framework using panel data from 1,140 firm-year observations of companies listed on the Tehran Stock Exchange between 2014 and 2023. The findings indicate that (a) longer CEO decision-making horizons are associated with greater dividend stickiness; (b) this effect diminishes in firms experiencing high earnings volatility or intense financial performance pressure, reflecting heightened manager–shareholder conflicts; and (c) CEOs’ behavioral traits are influential: myopic CEOs tend to reduce dividend stickiness, whereas risk-averse CEOs strengthen it, particularly in financially credible firms. These results remain robust across multiple sensitivity analyses.

Overall, the findings align with agency and upper echelons theories, suggesting that managers with long-term decision-making horizons enhance dividend stickiness by aligning their actions with shareholders’ long-term interests and prioritizing stable, predictable payouts over short-term adjustments. By integrating CEOs’ behavioral characteristics with firm-level financial conditions, this study offers novel insights into how executive traits interact with environmental factors to shape dividend policy. It contributes to the literature on behavioral corporate finance and governance by highlighting the mechanisms through which top executives’ long-term orientation and psychological traits influence financial decision-making and corporate stability.

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Interdisciplinary Journal of Management Studies

Articles in Press, Accepted Manuscript
Available Online from 18 May 2026

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