Impact of Dividend Payouts and Corporate Social Responsibility on Firm Value: Evidence from India

Rama Seth*, Sakthi Mahenthiran

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

We study 115 Indian listed companies (ILCs) over the period 2009–2012. The study explicitly connects the Indian way of doing business with a broader mission of serving the community by arguing that dividend payout policy and signaling via voluntary CSR disclosures are strategic decisions made by the board of directors of ILCs to balance the interests of multiple stakeholders. The study finds that signaling via CSR disclosures and dividends are complementary means of managing this broader mission of stakeholder relations. The findings in the Indian context are similar to the study of European firms by De Villiers et al. (2020) in showing that managers use both CSR disclosure and dividends to signal sustainable future performance. Additionally, the results suggest that this complementary relation between dividends and CSR disclosures is particularly valued by institutional investors.
Original languageEnglish
JournalJournal of Business Research
Volume146
Pages (from-to)571-581
Number of pages11
ISSN0148-2963
DOIs
Publication statusPublished - Jul 2022

Keywords

  • Indian way
  • Signaling theory
  • Agency conflict
  • Corporate social responsibility
  • Dividends
  • Firm value

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