What Kind of Indian Firms Omit Dividend? An Enquiry into Firm Characteristics and Propensity to Pay
No Thumbnail Available
Date
2025-02-28
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Through a temporal-spatial analysis over a 1971 through 2007 for India, we attempt to study
what kind of firms omit cash dividend, and how the cash dividend payers and non-payers
over the size and sign of earnings heterogeneity differ in respect of their different financial
characteristics and propensity to pay? It is examined whether changing firm characteristics
and / or changing propensity to pay determine corporate dividend decisions and influence
them to pay or omit cash dividends. In line with the global trends we uncover evidence in
favor of decreasing cash dividend payment behavior among Firms in the post-reform
periods compared to the former. A significant decrease in the number of firms paying equity
cash dividends is documented across small, medium, and large firms and also across firms
reporting profits and losses in the further-reform periods. Very importantly we identify and
attribute the reason to omit dividend to increase in general likelihood (propensity) by firms
to pay, despite their characteristics.