HuSS: International Journal of Research in Humanities and Social Sciences

Open Access Open Access  Restricted Access Subscription Access

Determinants of Dividend Policy in the Select Indian Manufacturing Industries – An Empirical Investigatio


Affiliations
1 Department of Commerce with Computer Applications, India
2 Department of Commerce, Vellalar College for Women (Autonomous), Erode, Tamil Nadu, India
 

Manufacturing sector has been recognized as the main engine for economic growth and creation of wealth in India. Accordingly, emphasis was placed on growth of industry in most of the five year plans formulated by planning commission of India. In the present complex corporate environment, the finance managers need to revise their strategies to manage the challenges posing them. Dividend declaration is considered to be one of the most important criteria for the distribution of value to the shareholders. Dividend policy adopted by a firm has an inference in the practical life for both the managers and the organization’s stakeholders. The present study aims to identify the factors determining the dividend policy of select Indian manufacturing companies for a period of 10 financial years from 2005-2006 to 2014-2015. The factors affecting dividend policy of select manufacturing industries in India are identified by using Lintner’s Model, Brittain’s Cash Flow Model and Brittain’s Explicit Depreciation Model. The factors identified with the models and other factors are grouped to extract the major determinants of dividend policy.

Keywords

Cash Flow, Depreciation, Dividend Policy, Lagged Dividend, Profit After Tax.
User
Notifications
Font Size

  • Sudhahar M. Determinants of Dividend Policy in Selected Indian Industries: An Empirical Analysis. Indian Journal of Finance. 2010 December; 4(12):29-39. ISSN 0973-8711.

  • Shaveta Gupta, Balram Dogra and Vashisht AK. A Study on Validity of Lintner’s Model of Dividend in Indian Companies. International Journal of Financial Management. 2011 October; 1(4):63-70.

  • Acharya and Mahapatra. Validity of Lintner’s Dividend Behaviour Model in Indian Banking Sector: An Empirical Analysis. Management Insight. 2012 June; 8(1):72-6.

  • Deepa and Mohan Raj. Determinants of Corporate Dividend Policy in Select Private Sector Cement Companies in Tamil Nadu - An Empirical Analysis. International Journal of Research in Commerce and Management. 2012 July; 3(7):107-13. ISSN 0976-2183.

  • Sumninder Kaur Bawa and Prabhjot Kaur. Empirical Validity of Dividend Policy Models in the Indian Manufacturing MSMEs. Excel International Journal of Multidisciplinary Management Studies. 2012 January; 2(2):18-39. ISSN 22498834.

  • Chaudhary Rashmi CA, Khare Sumi. Examining Application of Lintner’s Dividend Model in the Indian Pharmaceutical Industry. Journal of Venture Capital and Financial Services. 2013 January-December; 7(1/2):5-16.

  • Sobha Rani and Partha Sarathi. Determinants of Dividends in Indian Pharmaceutical Companies. International Journal of Scientific and Research Publications. 2013 May; 3(5):1-5. ISSN 2305-8277.

  • Lintner J. Distribution of Incomes of Corporation among Dividends, Retained Earnings and Taxes. The American Economic Review. 1956 May; 46(2):97-113.

  • Brittain JA. Corporate Dividend Policy. Washington, DC: The Brookings Institution. 1966; 7-12.

  • Brittain, JA. Corporate Dividend Policy. Washington, DC: The Brookings Institution. 1966; Chapter IV.

  • Hair J, Anderson RE, Tatham RL, Black WC. Multivariate data analysis, 4th ed. New Jersey: Prentice Hall Inc. 1995: 373.

  • Tabachnick BG, Fidell IS. Using Multivariate Statistics. Boston: Pearson Educational Inc. 2007; 611.

  • Other References

  • Chandra Sekhar Mishra and Vunyale Narendar. Dividend Policy of SOEs in India - An Analysis. Finance India. 1996 September; 10(3):633-45.

  • Jasvir S Sura, Karam Pal and Bodla BS. Factors Influencing Dividend Policy Decisions in Banking Sector: An Indian Evidence. Amity Business Review. 2006 June-December; 7(2):64-75.


Abstract Views: 661

PDF Views: 410




  • Determinants of Dividend Policy in the Select Indian Manufacturing Industries – An Empirical Investigatio

Abstract Views: 661  |  PDF Views: 410

Authors

S. Kalaiselvi
Department of Commerce with Computer Applications, India
C. Brundha
Department of Commerce, Vellalar College for Women (Autonomous), Erode, Tamil Nadu, India

Abstract


Manufacturing sector has been recognized as the main engine for economic growth and creation of wealth in India. Accordingly, emphasis was placed on growth of industry in most of the five year plans formulated by planning commission of India. In the present complex corporate environment, the finance managers need to revise their strategies to manage the challenges posing them. Dividend declaration is considered to be one of the most important criteria for the distribution of value to the shareholders. Dividend policy adopted by a firm has an inference in the practical life for both the managers and the organization’s stakeholders. The present study aims to identify the factors determining the dividend policy of select Indian manufacturing companies for a period of 10 financial years from 2005-2006 to 2014-2015. The factors affecting dividend policy of select manufacturing industries in India are identified by using Lintner’s Model, Brittain’s Cash Flow Model and Brittain’s Explicit Depreciation Model. The factors identified with the models and other factors are grouped to extract the major determinants of dividend policy.

Keywords


Cash Flow, Depreciation, Dividend Policy, Lagged Dividend, Profit After Tax.

References





DOI: https://doi.org/10.15613/hijrh%2F2017%2Fv4i2%2F167549