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The dividend strategy of Indian companies: An empirical assessment

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  • Ghosh, Saibal

Abstract

The paper uses firms across different ownership categories to examine the factors influencing dividend policy. The results suggest that bigger, mature and low-leveraged firms tend to pay more dividends. As well, the findings suggest that bigger, less profitable and high-leveraged firms are more likely to initiate a dividend cut.

Suggested Citation

  • Ghosh, Saibal, 2010. "The dividend strategy of Indian companies: An empirical assessment," MPRA Paper 29567, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:29567
    as

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    File URL: https://mpra.ub.uni-muenchen.de/29567/1/MPRA_paper_29567.pdf
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    References listed on IDEAS

    as
    1. Caprio,Gerard & Honohan,Patrick & Stiglitz,Joseph E. (ed.), 2006. "Financial Liberalization," Cambridge Books, Cambridge University Press, number 9780521030991, March.
    2. Stulz, ReneM., 1988. "Managerial control of voting rights : Financing policies and the market for corporate control," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 25-54, January.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Ghosh, Saibal, 2009. "Productivity and Financial Structure: Evidence from Indian High-Tech Firms," MPRA Paper 19467, University Library of Munich, Germany.
    5. Raghuram Rajan & Henri Servaes & Luigi Zingales, 2000. "The Cost of Diversity: The Diversification Discount and Inefficient Investment," Journal of Finance, American Finance Association, vol. 55(1), pages 35-80, February.
    6. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 2000. "Agency Problems and Dividend Policies around the World," Journal of Finance, American Finance Association, vol. 55(1), pages 1-33, February.
    7. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    8. Nandini Gupta, 2005. "Partial Privatization and Firm Performance," Journal of Finance, American Finance Association, vol. 60(2), pages 987-1015, April.
    9. Ofer, Aharon R & Thakor, Anjan V, 1987. " A Theory of Stock Price Responses to Alternative Corporate Cash Disbursement Methods: Stock Repurchases and Dividends," Journal of Finance, American Finance Association, vol. 42(2), pages 365-394, June.
    10. repec:hrv:faseco:30747163 is not listed on IDEAS
    11. Ghosh, Saibal, 2006. "Did financial liberalization ease financing constraints? Evidence from Indian firm-level data," Emerging Markets Review, Elsevier, vol. 7(2), pages 176-190, June.
    12. Miller, Merton H & Rock, Kevin, 1985. " Dividend Policy under Asymmetric Information," Journal of Finance, American Finance Association, vol. 40(4), pages 1031-1051, September.
    13. Seppo Kinkki, 2008. "Minority Protection and Dividend Policy in Finland," European Financial Management, European Financial Management Association, vol. 14(3), pages 470-502.
    14. Gugler, Klaus & Yurtoglu, B. Burcin, 2003. "Corporate governance and dividend pay-out policy in Germany," European Economic Review, Elsevier, vol. 47(4), pages 731-758, August.
    15. Chhibber, Pradeep K & Majumdar, Sumit K, 1999. "Foreign Ownership and Profitability: Property Rights, Control, and the Performance of Firms in Indian Industry," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 209-238, April.
    16. Sudipto Bhattacharya, 1979. "Imperfect Information, Dividend Policy, and "The Bird in the Hand" Fallacy," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 259-270, Spring.
    17. Jayesh Kumar, 2004. "Corporate Governance and Dividends Payout in India," Finance 0409007, EconWPA.
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    More about this item

    Keywords

    dividend strategy; leverage; firm size; manufacturing; India;

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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