Title: Does institutional investors' heterogeneity impact the dividend policy? Evidence from India

Authors: Geeta Singh; Rajesh Pathak

Addresses: IBS Hyderabad (ICFAI Foundation for Higher Education), Shankarpally Road, Hyderabad, Telangana, 501203, India ' Indian Institute of Management Raipur, Atal Nagar, P.O. – Kurru (Abhanpur), Raipur (CG) 493-661, India

Abstract: In this paper, we examine the impact of ownership level of different institutional investors on the dividend policy of the Indian firms, publicly traded on the National Stock Exchange of India from 2010 to 2019. We focus on the heterogeneous characteristics of various institutional investors and examine the way they impact the dividend policy of the firms. Further, we also examine how the affiliation to a group impacts the relationship between different shareholders and dividend payout and provide evidence for the moderation effect of group-affiliation status of firms such that the monitoring role of the institutional investors is subsided in the member firms of a group. We provide empirical justification for the association between different categories of institutional shareholders and dividend policy, while highlighting the role of group affiliation on the hypothesised relation.

Keywords: dividend; institutional investors; FII; bank; mutual fund; agency problem; information asymmetry; India.

DOI: 10.1504/IJCG.2024.138075

International Journal of Corporate Governance, 2024 Vol.14 No.2, pp.95 - 117

Received: 02 Feb 2023
Accepted: 02 Nov 2023
Published online: 21 Apr 2024 *

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