DETERMINANTS OF DIVIDENDS BEHAVIOUR IN INDIAN IRON AND STEEL INDUSTRY
Dr. Darishisha War Thangkhiew
In the paper the determinants of dividends in Indian Iron and Steel Industry are being investigated in the framework the Lintner’s model. According to his hypothesis profit and past dividend payment are the two most important factors governing the dividend decision of any firm. The explanatory variables considered for the study are flow of net debt, profit after tax, lagged dividend, gross fixed investment and inventory investment. This paper used the data of public limited companies, which are non-governmental and non-financial, for the period 1999-2000 to 2010-11. The model has three specifications in which time series, cross section and pooled data is employed for estimation using ordinary least squares method. The results of the three above mentioned analyses, revealed the importance of current profit and lagged dividend in determining the dividend payout decision in Indian iron and steel industry.
KEYWORDS: dividend, Litner’s model, lagged dividend, profit.
JEL classification numbers: C31, C32, C3, G35