FIRM PERFORMANCE AND DIVIDEND POLICY IN INDIA – MODERATING EFFECT OF CRISIS (PANDEMIC) PERIOD

Abstract

Shareholders’ wealth maximisation is the prime goal of any organisation. This is mainly dependent on the firm’s performance which is connected with the return on the investment in lieu of the risk availed by the shareholders. Accordingly, sustaining the shareholders’ interest and stabilising the firm’s performance should be the core aspects of any organisation. Recently, the whole world has suffered from the pandemic effect which has impacted the whole financial condition of organisations and Indian companies are not an exception. Considering this aspect, the main aim of this paper is to examine the moderating effect of the crisis period which has arisen due to the pandemic on the relationship between the dividend policy and the firm’s performance. 433 companies listed on NSE has used for analysis purposes for the period of 2017 to 2021. The study evidenced the moderating effect of crisis on relationship between dividend policy and firm performance. More so, liquidity and leverage are positive and significant to the firm performance whereas dividend payout and firm size have no significant impact on firm performance. The results of the study are implicated to managers, stakeholders, investors as well as academicians as it contributes novelty in financial performance literature by addressing the moderating effect of the crisis period on the relationship between dividend policy and firm performance.