Dividend Behaviour of Corporate Firms in Emerging Markets: An Empirical Analysis of Indian Firms

Abstract

This study examines dividend behaviour of Indian corporate firms in anemerging market context and identifies characteristics of dividend payers andnon-payers during the period 1991 to 2001. Analysis of dividend trends for alarge sample of stocks traded on the Indian markets indicate that thepercentage of companies paying dividends has declined from 60.9 percent in1990 to 32.3 percent in 2001 and that only a few firms have paid consistentlevels of dividends. Of the payers, regular payers have consistently paidhigher dividend s compared to other firms. Overall Indian firms have becomeless likely to pay dividends by the close of century. Dividend-payingcompanies are more profitable and larger in size in comparison to nonpayers,though growth opportunities do not seem to have significantinfluence on the dividend policy of Indian firms.