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Board diversity and dividend policy in India

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Abstract

This study investigates the association between board diversity attributes – gender, experience, age, nationality, educational level, and tenure ‒ and dividend policy in Indian firms. We use the dividend payout ratio and dividend yield in a panel Tobit regression model. Our panel dataset comprises 65 firms drawn from the NIFTY 100 Index of India's National Stock Exchange (NSE) between 2013 and 2019. Our evidence shows that gender and experience diversities help explain why firms pay high dividends. Female directors encourage paying high dividends. In contrast, age diversity is a negative determinant of dividend policy. Foreign directors are an insignificant determinant of a firm's dividend policy, perhaps because they represent a small percentage of the board. Educational and tenure diversities are also insignificant drivers of dividend policy. This study contributes to agency and resource dependence theories by considering specific board diversity attributes among Indian firms related to dividend payments.

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Notes

  1. Multiply the coefficient of FemBrd (.352) with the standard deviation of FemBrd (.071); Note: SE stands for standard error.

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  1. Faculty of Business, Law and Digital Technologies, Solent University, E Park Terrace, Southampton, SO14 0YN, UK

    Ajab Khan

  2. Faculty of Business and Law, University of Portsmouth, Richmond Building, Portland Street, Portsmouth, PO1 3DE, UK

    Ajab Khan

  3. Department of Finance and Real Estate, Kogod School of Business, American University, 4400 Massachusetts Avenue, NW, Washington, DC, 20016, USA

    H. Kent Baker

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Khan, A., Kent Baker, H. Board diversity and dividend policy in India. Asia Pac J Manag (2023). https://doi.org/10.1007/s10490-023-09922-4

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