The Ownership and Industry Effects of Corporate Dividend Policy in India, 1961-2007

Kamat, Manoj S. (2009): The Ownership and Industry Effects of Corporate Dividend Policy in India, 1961-2007.

Abstract

The cross-sectional trends in dividends are investigated at an aggregate level of ownership (i.e. closely/largely held and regulated firms), and at disaggregate level across 20 industries to examine how Indian Private Corporate Sector appropriated its profits over 1961-2007 periods. Alternatively it is examined whether internal funds are a significant source of finance and the dynamics of relation between dividends relative to earnings across type of companies and industries. Indian corporate sector pays relatively more equity dividends than preference dividends. Other things being equal, the probability of paying cash dividends decreases with share holder concentration and the regulated companies pay relatively larger dividends. Dividend payouts for all type of firms decline, and such tendency is more pronounced after liberalization periods indicating a greater choice of internal financing through retained earnings. The analysis of inter-corporate and inter-industry variations reveals that dividends interplays differently with exogenous factors.

• Item Type: MPRA Paper
• Language: English
• Keywords: Dividend Policy, Indian Private Corporate Sector, Public and Private Limited Companies, Regulated Industry, Ownership Effect, Industry Cross-section
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; P - Economic Systems > P4 - Other Economic Systems > P43 - Public Economics ; Financial Economics; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B22 - Macroeconomics; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes

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