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Empirical Analysis of the Determinants of Dividend Payouts of Indian Banking Stocks Using Panel Data Econometrics

  • R. Venkataraman
  • Thilak VenkatesanEmail author
Chapter

Abstract

Dividend payout is the most vital decision that a company takes as it involves either satisfying shareholders today for their investments in the company or reinvestment of profits for future growth. The various theories associated with the dividend payout articulate capital structure, net profit, earnings per share and growth rate as the predictors. In this regard, the paper intends to analyse the capital structure and dividend decisions in the Indian banking sector. The study relied upon secondary data, which were extracted from the annual reports of the banks and BSE website. The selection of banks was based on data availability so as to frame the array for panel analysis and provide optimal solutions. Five banks were selected for a period of 12 years, three from private and two from public sector, respectively. Multiple regressions were used for obtaining initial variables for the study, and panel data econometrics was used to analyse the heterogeneity of cross section and time series to provide relationship among the dependent and independent variables. The return on assets and the size of the firm in terms of assets and the previous period debt/equity were observed key variables influencing the dividend payouts.

Keywords

Capital structure Dividend payout policy Panel data model 

JEL Classification

G32 G35 C33 

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Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  1. 1.Presidency CollegeBangaloreIndia
  2. 2.Bharathiar UniversityCoimbatoreIndia

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