Dividend policy and business groups: Evidence from Indian firms

R Manos, Victor Murinde, CJ Green

Research output: Contribution to journalArticle

27 Citations (Scopus)


We invoke theories of dividend policy and the market failure theory of business groups to investigate the impact of group affiliation on the dividend payment decision (to pay or not to pay?) and payout level decision (how much to pay?). We use a large sample of quoted, non-financial, independent and group-affiliated Indian firms. While we find that the payout ratios of group-affiliated firms are higher than those of independent firms, there is no clear evidence to support the view that this is due to the level of diversification or group size. Overall, we find that although they mitigate market imperfections, business groups remain vulnerable to information problems in the dividend payment decision and the payout level decision. (C) 2011 Elsevier Inc. All rights reserved.
Original languageEnglish
Pages (from-to)42-56
Number of pages15
JournalInternational Review of Economics and Finance
Issue number1
Publication statusPublished - 1 Jan 2012


  • Dividend policy
  • Business groups
  • India


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