Testing Lifecycle Theory of Dividends: Evidence from Indian Corporates

Authors

  • Neelam Rani The Institute of Cost Accountants of India

DOI:

https://doi.org/10.33516/rb.v45i1-2.71-83p

Keywords:

Life Cycle Theory, Retained Earning, Logit Regression.

Abstract

The present paper examines the lifecycle theory of dividends among Indian firms. The focus is to test whether the life-cycle theory explains Indian corporate payout policies. The data consists of firms listed on NSE and BSE. The time period of the analysis is from 1999-2018. Pooled OLS estimator, fixed effect and random effect estimators have been analyzed to understand the determinants of dividend paying companies in India. Multivariate logit regression has also been used to investigate the determinants of dividend payouts. Results of multivariate logit regression indicate that the ratio of retained earnings to total assets (and retained earnings to total equity) have a highly positive and a significant relation to the amount of dividend being paid, hence it is consistent with the life cycle theory. Dividend paying firms are larger in size, with higher profitability.

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Published

2019-07-31

How to Cite

Rani, N. (2019). Testing Lifecycle Theory of Dividends: Evidence from Indian Corporates. Research Bulletin, 45(1-2), 71–83. https://doi.org/10.33516/rb.v45i1-2.71-83p

Issue

Volume 45, Issue 1-2, April-July 2019

Section

Articles
Crossref
Scopus
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Europe PMC

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