Title: Exploring the relationship between dividend policy and stock price volatility: a sectoral analysis of Indian companies

Authors: Krishan Kumar; Neha Yadav; Jasvinder Kaur

Addresses: School of Commerce and Management, Starex University, Gurugram, Haryana, India ' Department of Management and Commerce, Baba Mastnath University, Rohtak, Haryana, India ' Department of Commerce, Kurukshetra University, Kurukshetra, Haryana, India

Abstract: Dividend policy and stock price volatility have a complicated interaction that can change depending on the industry, the firm's size, and the economy's overall state. This study investigates the nexus between dividend policy and stock price volatility of 42 selected companies from five sectors such as automobile, metal, energy and power, information technology, and textile sectors, taking the annual data from 2010-2011 to 2021-2022. From these sectors, companies listed in NSE are considered as the population for the study. The outcomes of the fixed effect reported the inverse and insignificant impact of the dividend payout ratio on stock price volatility and the favourable and highly significant impact of the dividend yield ratio on stock price volatility. It also observed that stock price volatility is positively and significantly impacted by debt to total assets. At the same time, the firm's size inversely and highly significantly influences stock price volatility. The other control factors, such as asset growth and earnings volatility, do not significantly impact stock price volatility.

Keywords: dividend policy; panel data analysis; stock price volatility; dividend payout ratio.

DOI: 10.1504/IJBPM.2026.152309

International Journal of Business Performance Management, 2026 Vol.27 No.2, pp.209 - 220

Received: 01 Sep 2023
Accepted: 04 May 2024
Published online: 16 Mar 2026 *

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