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This research aims to understand how corporate tax reduction impacts dividend payout decisions of large-cap Indian firms.

June 13, 2026INTERNATIONAL JOURNAL OF NOVEL TRENDS AND INNOVATIONOpen Access

"Impact of Corporate tax reduction on the dividend policies of the company

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Randomized trial investigates dividend behavior in large-cap Indian firms after tax reforms, suggesting limited effects.

This research aims to understand how corporate tax reduction impacts dividend payout decisions of large-cap Indian firms.
Analyzed a panel dataset of the top 100 large-cap firms from 2009–10 to 2024–25.
Employed various panel econometric techniques including Fixed Effects and Difference-in-Differences.
Constructed a firm-specific tax shock intensity metric to measure the reform's impact on individual companies.
Found tax reduction has no statistically significant impact on dividend payouts (tax shock coefficient non-significant).
Identified strong positive associations between internal financial attributes, like operating cash flow and liquidity, with dividend payout ratios.
Confirmed persistent dividend behavior, with firms adhering to stable payout policies driven by internal financial management.

Chirag Goyal (2026) studied this question.

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