Determinants of Dividend Policy of Indian Companies

Labhane, Nishant B.; Mahakud, Jitendra

doi:10.1177/0971890716637698

Cited by 49 publications

(69 citation statements)

References 36 publications

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“…Al-Ajmi and Hussain (2011) and Labhane and Mahakud (2016) show that cash ratio has a positive effect on dividend policy, but Jabbouri (2016) and Khan and Shamim (2017) find a negative effect. Afza and Mirza (2011), Jabbouri (2016), Labhane and Mahakud (2016), and Manneh and Naser (2015) show that debt ratio has a negative relationship with the dividend policy, but Hudiwijono et al (2018) using Indonesian construction companies report a positive effect. Abor and Bokpin (2010), Jabbouri (2016), Kumar et al (2012), and Patra et al (2012) show that asset growth negatively affects dividend policy.…”

Section: Business Perspectivesmentioning

confidence: 99%

Analysis of cash dividend policy in Indonesia stock exchange

Utami

Gumanti

2019

Investment Management and Financial Innovations

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Dividend policy has been puzzling for researchers for decades. The level of dividend varies not only across industries, but also across countries. This research analyzes the dividend policy of Indonesian public companies, in particular it examines the partial effect of cash ratio, debt ratio, company size, profitability, and asset growth on cash dividend policy in Indonesia Stock Exchange from 2008 to 2015. A total of 102 companies was used as a sample. The samples are divided into four groups: (1) a group of companies paying changeable dividends (Change group), (2) a group of companies paying continuous dividends, but then stop paying dividend (Omission group), (3) a group of companies that initially do not pay the dividends, but then continuously paying dividend (Initiation group); and (4) a group of companies paying constant dividends (Constant group). Results of hypotheses testing using multiple regression analysis show that profitability and asset growth affect dividend policy in all company groups. Company size affects dividend policy in the Change, Initiation, and Constant groups. Debt ratio influences dividend policy only in the Change group.

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Section: Business Perspectivesmentioning

confidence: 99%

Analysis of cash dividend policy in Indonesia stock exchange

Utami

Gumanti

2019

Investment Management and Financial Innovations

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“…Positive relationship is established between dividend payout and profitability, asset tangibility among Jordanian firms (Basil, 2011). Profitable, mature, and liquid Indian firms have higher dividend payout ratio (Labhane & Mahakud, 2016). Dividend payout among Indian firms have been on decline due to the dividend payout policies of smaller, less profitable, and younger firms (Labhane, 2017).…”

Section: Theoretical Postulatesmentioning

confidence: 99%

“…Tax variables were proxied by some studies (Brennan, 1970;DeAngelo & Masulis, 1980). Liquidity is proxied by current ratio (Labhane & Mahakud, 2016) along with other measures of liquidity. Tangibility measures include ratios like fixed assets divided by total assets (Titman & Wessels, 1988).…”

Section: Variable Selectionmentioning

confidence: 99%

Determinants of dividends among Indian firms—An empirical study

Kumar¹,

Sujit

2018

Cogent Economics & Finance

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The study aims to understand the determinants of dividend trends of Indian firms. The study was based on a sample of 31,234 firms representing 15 different industry sectors. Construction materials, machinery and transportation equipment sectors were the most dividend intensive sectors in India. Partial least square structural equation modeling methodology (PLS SEM) was employed to examine the determinants of the dividend intensity of Indian firms. Different schemes of path models were tested and the results show that the higher the financial leverage, the lower is the propensity to pay dividends. Firms with high intangibles are expected to have higher agency costs. High growth firms have low dividend payout policies. Dividend intensity of firms is directly related to the size of firm. Higher the R&D intensity of the firms, greater is the dividend intensity of the firms. Firms with higher agency costs tend to have higher dividend intensity. Higher agency costs lead to lower cash flows for Indian firms. Firms with higher liquidity tend to pay more dividends. Profitable firms tend to have higher dividend intensity.

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“…Analysing the determinants of the dividend policy of Indian listed companies, Labhane and Mahakud (2016) revealed that firms that were larger, more profitable, more mature and highly liquefied have higher dividend payout ratios. In contrast, firms with high investment opportunity, financial leverage, and business risks, have lower dividend payout ratios.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Although generally limited, the investigation of firms' dividend payment decisions in an emerging capital market like India have been done before (see Mahapatra & Sahu, 1993;Bhat & Pandey, 1994;Baker & Kapoor, 2015;Labhane & Mahakud, 2016). However, these studies have not explored the impact of catering incentives on dividend payment decisions specifically.…”

Section: Introductionmentioning

confidence: 99%

Impact of Catering Incentives on Dividend Payment Decisions: Evidence from Indian Firms

Labhane

2019

AJBA

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Manuscript type: Research paper Research aims: The present study examines whether the catering incentives of dividends can influence firms' dividend payment decision for 781 sample firms listed on the National Stock Exchange (NSE) of India during the period of 1995-2015. Design/Methodology/Approach: This study uses dividend premiums to measure the catering incentives of the dividends. The firms' dividend payment decision is measured by the propensity to pay dividends, and the decision to change dividend payments. Research findings: The empirical results indicate that the catering incentives of dividends have a significant positive impact on the changes in the propensity to pay dividends. The findings suggest that the higher dividend premiums indicating the investors' higher demand for dividends can induce managers to increase the amount of dividends paid. Firm managers are less likely to cut or omit dividends when the investors' demand for dividends is high as reflected by the higher dividend premiums. Theoretical contribution/Originality: The catering theory of dividend which is based on investor sentiment is new, and the empirical evidence supporting this theory is limited. This study aims to contribute to existing literature by examining whether the catering incentives of dividends can influence firms' dividend payment decision, in the context of India, during the period of liberalisation.

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Determinants of Dividend Policy of Indian Companies

Cited by 49 publications

References 36 publications

Analysis of cash dividend policy in Indonesia stock exchange

Analysis of cash dividend policy in Indonesia stock exchange

Determinants of dividends among Indian firms—An empirical study

Impact of Catering Incentives on Dividend Payment Decisions: Evidence from Indian Firms

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