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Corporate Governance and Dividend Policy: Testing the Family Firm Effect in India

Divyani Datta

DIP: 18.02.S01/20251004

DOI: 10.25215/2455/1004S01

Received: November 17, 2025; Revision Received: November 22, 2025; Accepted: November 26, 2025

Abstract

Dividend payout decisions are an important part of corporate financial policy. They are often influenced by the quality of corporate governance (CG) mechanisms within companies. This study looks at whether there is a connection between CG and dividend payout in India, focusing on family and non-family firms. The analysis uses data from the Nifty 100 index over ten financial years. Firm-level information was gathered from the CMIE Prowess database. Dividend payout ratio and dividend yield ratio served as the dependent variables, while selected CG variables, including board structure and ownership characteristics, acted as explanatory variables. Additional control variables were included to strengthen the study. Regression models helped show the relationship between CG and dividend payout and determine if ownership structure affects dividend distribution decisions. The results showed a strong association between better CG mechanisms and higher dividend payouts. Furthermore, family firms (FF), especially in India, were found to be more focused on dividends. Although global research has explored the connection between governance and dividends, there has been limited study of this relationship in India, particularly regarding family firms. This study contributes to the discussion by placing dividend payout in the larger context of CG and ownership structure in a developing economy. The findings have important implications for investors, regulators, and policymakers, as they highlight the role of governance in promoting fair returns for shareholders and in enhancing the accountability of family-controlled firms.

Keywords

The author(s) appreciates all those who participated in the study and helped to facilitate the research process.

The author(s) declared no conflict of interest.

This is an Open Access Research distributed under the terms of the Creative Commons Attribution License (www.creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any Medium, provided the original work is properly cited.

© 2025, Datta, D.

Responding Author Information

Divyani Datta @ divyanidatta@sxccal.edu

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Corporate Governance and Dividend Policy: Testing the Family Firm Effect in India

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Article Overview

ISSN 2455-670X

DIP: 18.02.S01/20251004

DOI: 10.25215/2455/1004S01

Published in

International Conference on Business Responsibility for Sustainable Development 17.12.2025

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