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Does mandating disclosure on dividend payout policy benefit shareholder?

Author

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  • Kumari, Pratibha
  • Pathak, Rajesh

Abstract

Shareholders constantly face the challenge of determining optimal dividends. While other emerging markets rely on fixed dividend regulations to ensure shareholders’ right for dividends, India adopts a disclosure-based approach. SEBI's regulation 43(A), 2016, mandates Indian firms to disclose their dividend distribution policies. We show that mandating firms to disclose their dividend distribution policies is an effective approach as it leads to a noticeable increase in both the probability and amount of dividend payouts.

Suggested Citation

  • Kumari, Pratibha & Pathak, Rajesh, 2024. "Does mandating disclosure on dividend payout policy benefit shareholder?," Economics Letters, Elsevier, vol. 236(C).
    • Handle: RePEc:eee:ecolet:v:236:y:2024:i:c:s0165176524000703
    DOI: 10.1016/j.econlet.2024.111587
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    More about this item

    Keywords

    Dividend policy; Disclosure; Dividend payout; Difference-in-difference; Logit regression;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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