This study aims to determine whether a firm’s dividends are influenced by the sector to which it belongs. This paper also examines the explanatory factors for dividends across individual sectors in India. This longitudinal study uses balanced data consisting of companies listed on the National Stock Exchange (NSE) of India for 12 years—from 2006 to 2017. Pooled ordinary least squares (POLSs) and fixed effects panel models are used in our estimation. We find that size, profitability, and interest coverage ratios have a significant positive relation to dividend policy. Furthermore, business risk and debt reveal a significantly negative relation with dividends. The findings on profitability support the free cash flow hypothesis for India. However, we also found that Indian companies prefer to follow a stable dividend policy. As a result of this, even firms with higher growth opportunities and lower cash flows continue to pay dividends. We also find evidence that dividend policies vary significantly across industrial sectors in India. The results of this study can be used by financial managers and policymakers in order to make appropriate dividend decisions. They can also help investors make portfolio selection decisions based on sectoral dividend paying behavior.
Purpose The purpose of this paper is to study the general trends in the area of dividend policy which will help to identify fertile research streams in this area with a potential for further investigation. Design/methodology/approach To conduct a systematic literature review, the authors use a three-step methodology to collect resources and thus evaluate the research work done in the area of dividend policy. First, the necessary data are extracted from the Scopus database using the relevant keywords. The initial search results are then narrowed down to include only English language journal publications which are stored in the file. Finally, this file is used as primary data for data analysis. Data analysis is done using bibliometric and network analysis tools to recognize the trends in dividend policy to help researchers identify emergent areas for future work to be done. Findings This study reveals that research in the area of dividend policy is rapidly expanding since 2005; affiliation statistics show that majority of the publications are done in the USA and the UK; and many questions linked to dividend decision remain unanswered, especially in respect of emerging markets. Originality/value There is a need to organize the literature and understand the different areas that have been explored by many researchers. This study attempts to recognize the important research studies, determine the current areas of research attention, provide an understanding for current research interest and provide guidelines for future studies in the area of dividend policy.
The global economic crisis in 1997 significantly impacted all corporate firms. Measuring valuation is becoming increasingly important in corporate firm analysis. Transparency in disclosures enables a company to meet market expectations while also adhering to regulatory requirements. The study’s primary purpose is to measure the impact of transparency and disclosures on the valuation of non-financial firms in India and explore the role of Environmental, social and Governance (ESG) as a moderator variable in determining the firm’s value. Panel data regression is the methodology adopted for the data analysis in the study. Panel Data of seventy-six non-financial firms was collected for ten years (2011–2020). Market capitalization is considered as a proxy variable for the valuation. The study results indicate that transparency and disclosures (TD) have a negative and significant influence on the value of the firms. Inferring that a higher degree of TD reduces the firm value. At the same time, the interaction term of TD and ESG show a positive significant association. This finding implies that high ESG reduces the negative impact of high TD on the valuation.
This study presents a systematic literature review of regulation, profitability, and risk in the banking industry and explores the relationship between them. It proposes a policy initiative using a model that offers guidelines to establish the right mix among these variables. This is a systematic literature review study. Firstly, the necessary data are extracted using the relevant keywords from the Scopus database. The initial search results are then narrowed down, and the refined results are stored in a file. This file is finally used for data analysis. Data analysis is done using scientometrics tools, such as Table2net and Sciences cape software, and Gephi to conduct network, citation analysis, and page rank analysis. Additionally, content analysis of the relevant literature is done to construct a theoretical framework. The study identifies the prominent authors, keywords, and journals that researchers can use to understand the publication pattern in banking and the link between bank regulation, performance, and risk. It also finds that concentration banking, market power, large banks, and less competition significantly affect banks’ financial stability, profitability, and risk. Ownership structure and its impact on the performance of banks need to be investigated but have been inadequately explored in this study. This is an organized literature review exploring the relationship between regulation and bank performance. The limitations of the regulations and the importance of concentration banking are part of the findings.
Purpose This study aims to evaluate the influence of corporate governance index (CGI), ownership concentration (OC) and other features on the dividends of listed Indian pharmaceutical companies. The other features included are leverage, excess return over cost of equity and stock-market return. This study thus helps to provide more insights on the dividend distribution issues for a shareholder in the challenging and demanding pharma industry, especially when stakes are high. Design/methodology/approach The data for all 26 pharmaceutical companies which form part of the NSE NIFTY-500 index for six years (2014–2019) is procured using Centre for Monitoring Indian Economy’s (CMIEs) Prowess database. An eight-pointer scale (unweighted scale) is used to develop the CGI. For OC, this paper considers the proportion of promoters’ shareholding, domestic institutional investors’ shareholding and foreign owners’ shareholding. Both static and dynamic panel data models are used to evaluate the effect of CGI and OC on dividends. Findings The panel data analysis depicts that CGI significantly positively influences the dividends of pharmaceutical companies in India. Thus, the authors find support for La Porta et al.’s outcome agency model. The results also reveal that only promoters’ holdings are significantly inversely related to dividends out of the three OC variables used for this study. This discussion implies that family-run pharmaceutical companies in India tend to retain profits instead of distributing dividends. Research limitations/implications This study provides two direct insights for policymakers and stakeholders. First, because this study shows that CGI significantly positively influences dividends, corporate governance (CG) is an essential factor for determining dividends. Second, because the results also reveal that OC in the hands of promoters hurts dividends, it implies that the higher the promoter holding, lesser is the dividend distributed by the company. Both these results can be used as a quantitative tool by investors to assess Indian pharmaceutical companies better. However, a similar study could be directed to assess the impact of CGI and OC on dividends of other industries. Moreover, additional variables of CG and OC can also be evaluated in further detail. There is also a need to empirically validate the impact of CG and OC on a company’s performance. Originality/value The results are robust and reveal that variation in CGI does impact dividend policy. This aids in confirming that CG is a crucial aspect influencing dividends. The findings also add to the increasing studies across the globe evaluating the influence of CG and OC on dividends.
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