Corporate Dividend Policy in India – Application of Dynamic Partial Adjustment Equation using Extended Instrumental Variable Approach
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Date
2025-02-28
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Abstract
This paper aimed to test applicability of dividend stability hypothesis and
add to the relatively limited literature on aspects of dividend decision by
examining the dynamics of relationship between dividend payouts and a
host of other explanatory variables. We model the dynamic panel data using
Partial Adjustment Model (PAM) within the framework of Generalized Methods
of Moments (GMM) using Instrumental Variable (IV) approach to advance
the knowledge of dividend and uncover the macro-economic determinants of
dividend along the variability of dividend policy practices in India for a longer
time window, 1971-2007.