How Does Dealing with Abusive Customers Cause Emotions to Run High

1. From an emotional labor perspective, how does dealing with an abusive customer lead to stress and burnout? In the case of dealing with an abusive customer, it could lead an employee to feel stress by having their felt emotions conceded by their displayed emotions and this could lead them to burn out if they have no solution. Most common stress relievers are exercising, talking to a friend or doctor, and good sleep. Furthermore, it should be an employee's skill and ability to learn emotional intelligence while not taking their customers seriously while using their emotional intelligence to deal with abusive customers and realize it is their profession and career. Through developing this emotional intelligence when dealing with abusive customers an employee would strengthen themselves by having the protection while not being affected by customer's negative emotions. They would be above the situation. This will eliminate burnouts and minimize stress. Since we are all humans and you cannot divorce emotions from ourselves as well as the workforce, we experience stress every now and then, no matter how thick our skin is. It is important then to know what helps you in relieving this stress. As a customer representative in case incident 1, their customers have never met them and have no knowledge of them. Customer representatives should first let their words go and deal with them professionally. 2. If you were a recruiter for a customer-service call center, what personality types would you prefer to hire and why? In other words, what individual differences are likely to affect whether an employee can handle customer abuse on a day-to-day basis? Finding the correct person for the right job position can be easier than it may appear on one condition, that the person who is applying for a customer service position is honest and truthful. If they were not, it would surely show in their work performance immediately. What I am getting as it is careers for ENFJ personality types. This is one of the sixteen personality types based on well-known research of Carl Jung, Katharine C. Briggs, and Isabel Briggs Myers to assess people's personality types from extraverted to introvert on whether or not they are meant for a particular job (Consulting, 2006). The categories for personality types are: 1. Extraverted or Introverted 2. Sensing or Intuitive 3. Thinking or Feeling 4. Judging or Perceiving From these four categories, results into the sixteen personality types and ENFJ are â€Å"Mentors† of these personality types, which are extraverted, feeling, and judging. ENFJ individuals are suited for sales and customer service representatives. They also thrive on guiding others; they focus on people, not things, not machines, not ideas, but people. As leaders, they have phenomenal interpersonal skills, unique salesmanship abilities, charisma, and are very good at persuading and manipulating others† as Career Planner. com says (CAREERPLANNER. COM, 2009). Therefore, as a recruiter having the applicants take the Myers- Briggs Type Indicator Test will indicate if they are qualified to withstand customer abuse on a day-to-day basis. Although this is just a questionnaire test, there are other factors involved in determining individual differences that affect how they handle customer abuse. Upbringing and shaping may have developed an individual to have the social skills to deal with abusive people, emotional intelligence and other job experiences may contribute to these differences as well. 3. Emotional Intelligence is one’s ability to detect and to manage emotional cues and information. How might emotional intelligence play a role in responding to abusive customers? What facets of emotional intelligence might employees possess who are able to handle abusive customers? Emotional Intelligence mentioned above in the first question discusses on the surface that dealing with abusive customers should use EI. Here I would like to elaborate further using the five dimensions found in research to explain how it plays a role in as well as what facets of EI might employees posses in responding to abusive customers. The role and facets in which emotional intelligence plays in dealing with abusive customers may first follow the fact of being aware of what you are feeling. As brought up earlier this is when you align your inner emotions and feelings with your displayed ones that are expected of you at work. In this sense, you are able to have the ability to manage your own emotions and impulses as to deal with abusive customers more readily (Robbins & Judge, 2007 p. 278). Within EI, one would also need the ability to persist in the face of setbacks and failures because we are all not perfect individuals, every customer service event may be dealing with different people taking a swing at you. A person may tend to get off track every now and then. Therefore, by firing back at them would be considered a failure and setback however, one must persist (Robbins & Judge, 2007 p. 278). The real intelligence here is having the ability to sense how the other is feeling. By showing ones, empathy to the customer, ones compassion and understanding, to help them, may create a better relationship out of that business transaction (Robbins & Judge, 2007 p. 278). This leads us to the fifth dimension social skills, in which to have the ability to handle the emotions of others. This dimension may not be able to be achieve were not for empathy since we must first understand and sense what perspective or attitude a person is coming from (Robbins & Judge, 2007 p. 278).

Care Ethics Essay

Did you ever stop and think long and hard about what type of person you are? Whether you put your needs before the needs of others, or if you care for others more than you care for yourself. The word â€Å"care† can mean many things. The ethics of care is a normative ethical theory about what makes actions right or wrong. It implies that there is moral significance in the elements of relationships and dependencies in human life. Care ethics normally seeks to maintain relationships by promoting the well-being of each other. The word â€Å"care† involves meeting the needs of not only our self, but others as well. It is inspired by memories of being cared for and the idealizations of self. Since â€Å"care† depends upon the contextual considerations, it is difficult to define. There have been at least three distinct but overlapping meanings that have emerged in the recent decades. It can be known as â€Å"an ethic defined in opposition to justice, a kind of labor, and a particular relationship. † In ethical literature, ‘care’ is most often defined as â€Å"a practice, value, disposition, or virtue, and is frequently portrayed as an overlapping set of concepts. One of the most popular definitions of care is â€Å"a species of activity that includes everything we do to maintain, contain, and repair our ‘world’ so that we can live in it as well as possible. That world includes our bodies, us, and our environment†. Care ethics was first most explicitly articulated by Carol Gilligan and Nel Noddings in the early 1980s. Gilligan, a graduate student at Harvard, wrote her paper outlining a different path of moral development than the one described by Lawrence Kohlberg, her mentor. Gilligan believed that her mentor Kohlberg’s model of moral development to be gender biased. She posed a different view and found that both men and women articulated the voice of care at different times, but pointed out that without women, the voice of care would nearly fall out of their studies. Later, Gilligan resisted readings of her work that suggests care ethics as relating to gender more than theme, and even established the harmony of care and justice ethics, but never fully abandoned her thesis of an association between women and relational ethics. Nel Nodding’s published Caring, in 1984. Caring developed the idea of care as a feminine ethic, and applied it to the practice of moral education. Nodding’s understood caring relationships to be basic to human existence and consciousness. She identified two parties in a caring relationship—â€Å"one-caring† and the â€Å"cared-for. † She stated that both parties have some form of obligation to care and meet the other morally, but not in the same manner. Nodding’s located the origin of ethical action in two motives. One is the human affective response that is a natural caring sentiment. The second is the memory of being cared-for that gives rise to an ideal self. She also identified two stages of caring, â€Å"caring-for† and â€Å"caring-about†. There were a number of criticisms that have been launched against care ethics. Some of the critiques include: slave morality, and that care ethics is empirically flawed. Care ethics as a slave morality is one of the first objections. The philosopher Frederick Nietzsche came up with the concepts of slave morality. Nietzsche believed that oppressed people tend to develop moral theories that confirm traits as virtues. This interprets the voice of care as emerging from traditions characterized by severely enforced sexual divisions of labor. Issues against caring practices are warned because women perform the work of care for their own economic and political disadvantage. This objection further implies that the voice of care may not be an authentic or empowering expression, but a product of false consciousness. Another critique is that care ethics is empirically flawed. People started to question the accuracy of Gilligan’s studies. She has been criticized that her conclusions are too narrow and that her studies were performed on an overly homogeneous groups. Critics argued that wider samples would be more accurate and yield more diverse results. Since care ethics has an association with women, it is often seen as a feminine ethic. Care ethics, feminine ethics, and feminist ethics are frequently seen as synonymous. However, not all feminine and feminist ethics are care ethics. The connection between care ethics and femininity has been subject to challenge. The idea that there may be a feminine approach to ethics can be traced far back into history. Assumptions of feminine ethics are that women are similar enough to share a common perspective, and that characteristically feminine traits include compassion, empathy, nurturance, and kindness. There is also the chance that it could be acknowledged that women are diverse, and that some men exhibit equally strong tendencies to care. It has been proven that many women, in actuality and in myth, do not display care. There are other factors known to correlate with care thinking such as: social identity, ethnicity, and class. But nonetheless, care is assumed to be a feminine trait. All in all, care ethics has a vigorous set of definitions and it can be understood in many different ways. It really can make you think of what is right or what is wrong on a daily basis. After learning about care ethics, it really makes me wonder about the ideal concept of it and what it means to me as an individual. Taking a look at the critiques of it, and whether or not you believe the critics or the philosophers who articulated it.

Group Treatment for Substance Abuse Essay Example | Topics and Well Written Essays - 1750 words

Group Treatment for Substance Abuse - Essay Example This situation usually arises after using these drugs and substances over a longer period of time that directly affects the working and functioning of brain and brain cells called neurons. This effect is usually in the form of addiction that is a disorder affecting brain connections such as those used in actions of reward and motivation, cognitive learning, memory skills, and controlling ones self and desires. With the increasingly alarming situation of substance abuse and drug addiction, experts worldwide has recognized it as one of the most critical problems rising at exponential rates. This has increased the needs and encouraged different methodologies that exist as effective and efficient treatment for the problem. Devising quick and effective treatment methods has become mandatory in order to protect and heal significant portion of worlds population from this illness. Group therapies are one of the most successful treatment methodologies in this regard; the reason that group therapies are most preferred is because of the effectiveness both in term of cost and performance. Nowadays, group therapies have emerged as the potential healing force bearing fruits that are hardly achieved in an individual or personal therapy setup. Another point in this regard is the fact that group therapies efficacious because it constantly use therapeutic powers like care, emotional and mental support, association, bonding, and peer encounter. These forces make the client strong enough to establish a bonding that encourage quick recovery and ensures effective healing. The other benefit of using group therapy is their efficacy in the treatment of problems that comes with addiction like depressive feelings, getting isolated from environment, shame, and guilt. Making groups or utilizing group therapies usually result in significant advantages to the group members. Group helps establishing a bond due to which

HSA 530 week 11 DB1 & DB2 Coursework Example | Topics and Well Written Essays - 500 words

HSA 530 week 11 DB1 & DB2 - Coursework Example The knowledge I have gained through reading several literatures has also been key towards molding me to be a future dependable human resource manager. This course entails a lot relevant to the issue of human resource management. The course entails employee relations management, customer relations management, communication management, as well as conflict resolution among other things. Employee relations management is important in achieving the maximum productivity of the employees. A customer relations management is geared towards maintaining the increased levels of consumption of the goods by the customers, thereby influencing the profit maximizations b the organizations. Communication management is important in ensuring effective ways of communicating to different levels of staff, as well as aide in conflict resolution. It is true that initially, we did not have any clue on what the course was all about. However, with time, learning advanced into several stages. This made us gain knowledge on several things that the course entails. As Jasmyne asserts, it is true that our skills have really matured relevant to the readings and knowledge gained from this course. This course has also imparted into us the ability to face challenges with optimism as Jasmyne puts it. This involves broadening our ways of viewing things. This has also prepared us for new endeavors that may come our way as Jasmyne has asserted. I totally agree with Sheila’s post on the speech concerning the contents of this course. Sheila as noted that human resourced was developed to modify the employee relations. This is true since one of the contents of the course entails employee relations management. Moreover, she has also mentioned something concerning the issue of organizational conflict that is also covered in the course. As such, it is within my consideration that Sheila has been right on her opinions concerning some of the contents of the

Information Technology and Explosive Change Essay

Information Technology and Explosive Change - Essay Example Over the years, the level of innovation that technology has brought in the running of companies is unprecedented. Unlike before when the use of technology was confined to some few business set ups, today, information technology is in use in almost every company to bring about swift changes in the way companies go about their everyday activities – thus innovation. With technological innovations, information technology tools are today at the hem of affairs instead of manual application of human strength and knowledge. Such innovations have brought about speed in the delivery of work, thereby making companies have higher outputs. This means that efficiency generally go up with innovations because â€Å"many people have the tools to design new and innovative software to solve common problems and improve efficiency† (Global Guru, 2009). As information technology enhances and increases rate of production with innovative ways of getting production implemented, information technology again plays an important role of ensuring that products and services reach as many customers as possible. In times past, people living in one country barely had an idea about the kind of business that went on in other countries. Today, companies with just one branch in one country can boast of global customer base because of the power of information technology. Via the internet, companies of all kind – including individual freelancers make thousands of dollars a month because of the expanded reach of customer base that information technology offers them. To conclude, all companies who have not fully come to embrace the miracle of technology are advised to do so. Research among companies on how best they can utilize technology should not stop so that they will not lug behind in the new global trend. National Institute of Health (2011). Using Technology to Study Cellular and Molecular Biology. Retrieved October 31, 2011 from

Comparison Of Love Poems Essay Example | Topics and Well Written Essays - 750 words

Comparison Of Love Poems - Essay Example However, I would say that Ted Hughes had not succeeded in blotting out the unpleasant events. Overall, this poem examines their wedding day in retrospect, and I would say that this poem was a realization for everything that had happened that he probably never got to understand at that time. First off, he describes his plain outfit on his wedding day: â€Å"sole, drab, veteran RAF black†. This description of his clothes and the way he emphasized Sylvia’s outfit on this day (which was even made the title of the poem) seemed to show how contradicting their feelings were toward their own wedding. I cannot help but think that this poem shows that only one party was ecstatic at this event: only Sylvia. This is shown in the last two stanzas of the poem, which described the happiness that Ted Hughes saw in Sylvia Plath during their wedding. Clearly, he was aware of how much this wedding meant to his wife. This was evidently one of her happiest days despite the lack of a grand c elebration. However, for his part, the poet used strong words that suggest the feeling of being forced into getting married: exhausted, conscript, squeezed. Despite having a title that seems to convey sweetness and beauty, this poem for the most part, describes how their wedding was unlike any other wedding day. They did not really choose the location of their wedding, which would normally be one of the first considerations in wedding preparations. Next, they did not even have a wedding entourage, and they had to request the sexton, of all people, to be the ring-bearer. Finally, his family and friends did not even know that he was getting married. On the contrary, Sylvia Plath’s â€Å"Wreath for a Bridal† is a magical recollection of their wedding day. Written in the same year as her wedding, the poem conjures images of beauty and nature. Perhaps despite the lack of preparations, Sylvia was personally convinced that she had the most beautiful wedding

The Financial System Crisis of August 2007 Essay

The Financial System Crisis of August 2007 - Essay Example This category is the most risky element of the mortgage market and over-exposure to this segment put banks in high risk. Although the sub-prime mortgage market in the United States constitutes only a small proportion of the entire market, the uncertainties related to the liquidity of the banks' financials took the situation to critical levels. On August 31, 2007, Federal Reserve Chairman Ben Bernanke noted that "[a]lthough this episode appears to have been triggered largely by heightened concerns about subprime mortgages, global financial losses have far exceeded even the most pessimistic projections of credit losses on those loans" (Open CRS, 2007). Suddenly, there was a loss in liquidity in all financial markets in the US, including the securities markets. Fears of risks began to grow and most financial institutions began to invest in the safest financial instrument, that is, US Treasury Bonds. Even the market for commercial paper nearly froze as a result of which large corporation s found it difficult to raise funds for their day-to-day operations (Beams, 2007). The real cause of the crisis may be traced back to the rise in the housing credit market boosted by low interest rates since 2000. In order to boost consumer spending after the dotcom bust of 2000, interest rates were lowered. As a result, not only did people begin to buy more houses, they also refinanced the property to with further mortgages. As a result, consumer spending in the economy grew phenomenally and savings petered. By the beginning of 2007, defaults on loans began to grow, reaching 30 percent higher than what it was a year ago and credit card companies had to write off 4.8 percent of the receivables (Beams, 2007). Many sub-prime lenders like New Century Financial Corporation had to file for bankruptcy following a significant amount of foreclosures as a result of default on payments (wikipedia) and on the whole stock prices of mortgage companies were the first to be affected. Analysts have argued that the roots of the financial crisis of August 2007 originate from the global economic trends over the last decade. Globalization and inter-linkages of financial markets have resulted in heightened uncertainties and global financial imbalances. The US government finances have turned from surpluses in the 1990s to a deficit, public debt being 64.7 percent of GDP in 2005, close to what it is in other industrialized countries (CIA). This has largely been the result of tax cuts in the past, in order to boost growth since the dotcom bust in 1999-00, as well as increased outlays for defense and military spending necessitated by rise in terrorism at home as well as initiatives in the middle East. Hence, the fiscal policy that spurred economic recovery resulted in rise in interest rates (Muhlesein & Towe, 2004). The US monetary policy has largely supported the fiscal policy-induced growth. The growing current affairs deficit of nearly 7 percent of GDP, that is the deficit between what the country earns abroad and what it spends, has been a cause for concern. US external debt has been close to 25 percent of GDP for over two years (Setser et al, 2005). Much of this deficit is financed by foreign central banks subscribing to US Treasury Bonds, particularly the central bank of China, which has had the fastest growth among all

Job description and analysis Essay Example | Topics and Well Written Essays - 500 words

Job description and analysis - Essay Example On the other hand, removing Helen from the group may result in the loss of her exceptional knowledge and skills from the group. This leaves the Harmening’s first option whereby Katie can make efforts to smooth out the process. She needs to understand clearly the genesis of the problem through talking to the group members and encouraging them to raise particular issues that they think should be addressed. A careful analysis of the group’s responses will offer a good foundation towards smoothing out the process. Task analysis is necessary in this situation to determine the whether Helen is properly equipped to perform her tasks effectively. Without proper equipment and space, she may certainly desire to use other people’s working space which might be more appealing than her own. If she has all the requirements and doesn’t perform her tasks on time, then she needs to be asked to explain the reasons and also to be reminded to pay attention to the time limit for completion of the tasks. On the other hand, if her knowledge and skills demand greater responsibility, her tasks can be adjusted to keep her engaged in the extra time in which she has been roaming to co-workers (Harmening 175). Katie needs to develop a list of duties for all members of the group including Helen and to ensure that all of them understand their tasks and that no one should interfere with those of another person unless when asked to help. Interaction within the group should be aimed at increasing efficiency a nd not lowering the speed of performing tasks (Harmening 177). All employees need to understand the employer’s expectations and hence a performance evaluation should not come as a surprise for Helen. Katie needs to make Helen understand the trend in the turnaround time since she joined the group. This revelation should enlighten Helen with regards to her role in this new development without causing her embarrassment

Identifying Long Term Trends SLP Essay Example | Topics and Well Written Essays - 500 words

Identifying Long Term Trends SLP - Essay Example have sufficient funds to fully invest there business in Canada, and as a result the financial managers may decide to source some funds from a financial institution. However, these funds will be associated with an interest rate set by the lender. During inflation period, the interest rates will tend to be higher, this will affect the amount of interest that will accrue to the loan borrowed (Mankiw, 2012). Financial managers of Fedex corporation should therefore, consider interest applicable before deciding where to source there funds. As an economic variable, the stock market affects FedEx Corporation, Canada’s expansion program. This is because the stock market index based on Canada’s stock exchange gives a prediction of the expected future value of stock prices. In case, there is a high value index FedEx Corporation should continue to carry out its expansion to Canada because the financial managers expect high profits as a result, of rapid economic growth accompanied b y low levels of unemployment. Financial managers need to also determine the rate of inflation in Canada before carrying out there investment. If inflation is high it then means that consumers prices will be high, and in turn will affect how they spend there money (Mankiw, 2012). If inflation is high FedEx Corporation will fix the prices of there services high, and as a result, consumers will not use the services because they cannot afford it. During inflation, it is extremely difficult for FedEx to determine how much income to generate, this is because it is difficult to determine the demand for there services at the higher prices (Mankiw, 2012). In addition, the financial managers of FedEx Corporation should focus on the trends of the real gross domestic product as it gives a measure of what the economy produces goods and services besides giving an accurate measure of changes in the price levels. In addition, the financial managers of FedEx Corporation should take into consideration the

Discuss the process of making meaning in the face of confusion, loss Essay

Discuss the process of making meaning in the face of confusion, loss or limitation using the spiral Jetty and the documentry bomb it as resources - Essay Example One of the greatest art masterpieces is Spiral Jetty performed by Robert Smithson. The monumental earthwork Spiral Jetty (1970) is located on the Great Salt Lake in Utah. â€Å"Using black basalt rocks and earth from the site, the artist created a coil 1,500 feet long and 15 feet wide that stretches out counter-clockwise into the translucent red water† (Smithson Robert:Spiral Jetty). Those tourists who have visited this place of art energy claim it to be the greatest monument they have ever seen. The sculptor built the Jetty when the water level of the lake was quite law, therefore in several years it disappeared under water after the spring flood. Then it reappeared several times during the history of its existence and since 2005 due to the drought it gives the chance for everyone to admire it. Imagine that you have to construct such monument in a very short period of time because of the rising tides and you have to do a lot of things: to make the project of the masterpiece, to find proper funding, to hire the working group and to cope with all those problems that arise during the process of creation. I believe that the author had multiple problems while fabricating this piece of art, but he managed to do it. And now the walk along the salty rocks and the red path encourages other people to cope with their problems and fills them with enthusiasm. The thought that they have may be something like this: â€Å"If he managed to subjugate the elements, then I can solve my trifle problems easily and everything is going to be OK†. I think that admiring such grandeur pieces of art as Spiral Jetty brings meaning to our lives. Another example that I had to analyze and connect it with making meaning in life is performing graffiti art. The documentary presents the video about those guys who cannot imagine their lives without bringing colors on the walls of the houses, on the brick fences and sometimes on vehicles. The movie tracks the competition

Microeconomic Theory Essay Example for Free

Microeconomic Theory Essay 1. Explain why society faces a trade-off between consumption goods and capital goods. Society is faced with trade off between consumption goods and capital goods in that resources are scarce, and therefore it has to make choices based on the opportunity costs of benefiting from consumption at present or having a greater level of consumption tomorrow through investment in capital goods. 2. Distinguish between absolute and comparative advantage. Absolute advantage refers to that trade, which is not reciprocally favorable as opposed to a Comparative trade, where trade is reciprocally favorable. 3. Explain the Law of Demand. The law of demand states that as the price of a service or good increases, consumer demand for the service or good will decrease and vice versa, provided all other factors remain constant. 4. Explain the Law of Supply The law of supply states that as the price of a service or good increases, the quantity of services or goods tendered by suppliers increases and vice versa, provided all the factors remain constant. 5. Explain the effects of price ceilings. It is a kind of government measure, where it fixes a limit on the price to be charged on a product. Effective price ceiling must be different from the free market price. A price ceiling positioned below the free market price will put suppliers in a state where they can no longer charge what they had been charging, for that particular product. This will force some suppliers to move out of the market, hence reduction in the quantity produced. On the other side quantity demanded will increase for the same product because consumers are able to buy at a lower price. Since quantity demanded exceeds quantity produced, a shortage will occur and it will result to non-price competition 6. Explain the effects of price floors. It is a kind of government measure where it imposes a limit on the lowest price that can be charged on a product and for it to be effective it must be set higher than the equilibrium price. When the price floor is position above the market equilibrium price, consumers observe that they now have to pay a higher price for that particular product. Suppliers, on the other part are ensured higher price than what they were charging before. This has the effect of increasing production, hence excess supply of the product in the market. Thus to maintain price floor over a longer period, the government will be forced to take action to reduce the excess supply 7. Distinguish between private goods and public goods and explain the nature of the free-rider problem. Private goods are the kind of goods whose profits, are indivisibly spread over the whole community, even if the individuals do not desire to purchase it. While private goods refers to the ones that are divisible and can be provided separately to various individuals, without external costs or benefits to others. Positive externalities that are not remunerated normally result from the production of public goods. When private organizations are not getting all the profits of a public good that they have produced, there will be no sufficient incentives to produce it voluntarily. Hence, consumers will take advantage of public goods without sufficiently contributing to their production. Distinguish between average tax rates and marginal tax rates. Average tax rate refers to the total amount of taxes paid divide by income. It shows the sum of tax paid per dollar earned while marginal tax rate refers to the income tax rate paid on the last dollar of income earned 9. Distinguish between average tax rates and marginal tax rates. Average tax rate refers to the total amount of taxes paid divide by income. It shows the sum of tax paid per dollar earned while marginal tax rate refers to the income tax rate paid on the last dollar of income earned 10. Explain the structure of the US income tax system. The structure of US tax system is very complex one that entails payment to at least four various levels of government and many ways of taxation. US taxation comprises local government possibly consisting of one or more of township, municipal, county and district governments. It may also embrace regional entities like school and utility and transit districts as well as incorporating federal government and state 11. Describe how prices indexes are calculated and define the key types of price indexes Price indexes refers to a standardized average or a weighted average of prices for a given category of services and goods in a given place, over a given intermission of time Types of price indexes include consumer price index, producer price index and GDP deflator 12. Distinguish between nominal and real interest rates. Nominal interest is the rate of interest prior to adjustment for inflation in contrast to real interest rate and it encompasses all three risk factors plus the time value of money in contrast to real interest rate, which includes only systematic and regulatory risks. Generally, real interest rate is equal to nominal interest rate minus inflation and currency adjustment. 13. Describe the circular flow of income and output. The circular flow of income and output shows joint flow of income between consumers and producers. The mutually supporting entities of consumers and producers, referred to as households and firms respectively offer each other with factors to facilitate the easy flow of income. Firms supply consumers with services and goods in exchange for consumer spending and factors of production from the household. 14. Define gross domestic product (GDP). Gross domestic product is the total market value of all the final services and goods produced within a country over a given period. 15. Define economic growth. Economic growth refers to the sturdy process by which the productive capacity of the economy is increased over time to produce growing levels of national income and output 16. Discuss the fundamental factors that contribute to a nation’s economic development. Policies of national development need to be formulate in conformity with national needs, development priorities and conditions and should focus on the lessons erudite from decades of development. International cooperation in the formulation and implementation of macroecomic policies need to be reinforcing with an analysis to enhancing greater lucidity and consistency of domestic policies and in so doing reinforcing their effectiveness. 17. Describe the effect of economic growth on the long-run aggregate supply curve. Economic growth will cause the aggregate supply curve to shift. Positive economic growth will lead to increase in productive resources that will make it possible to produce more final services and goods, thus the natural level of real GDP increases. Positive economic growth will make the LAS curve to shift to the right and vice versa 18. Discuss the meaning of the long-run equilibrium for the economy as a whole. Long run equilibrium refers to where the aggregate demand and long run aggregate supply curves intersect. Output is fixed and the price level is variable in the long- run. Thus increases in aggregate demand leads to higher prices and vice versa 19. Discuss the central assumptions of the classical model. The central assumptions of classical model are that it assumes that economic agents’ posses’ perfect information and the markets are characterized by perfectly flexible wages and prices. The result of these assumptions if functional on the short run with fixed capital stock is that output is dogged by independent supply factors 20. Describe the short-run determination of equilibrium real GDP and the price level in the classical model. The aggregate supply-aggregate demand is the fundamental macroeconomic tool for studying output variations and the resolve of the price level and inflation rate. The intersection of the aggregate demand and supply curves determines the economy’s equilibrium price level and equilibrium real domestic output 21. Distinguish between saving and savings and explain how saving and consumption are related. Saving refers to that process of constantly putting aside a sum of money while savings is that income received by a consumer not used in the output of firms through spending. Savings and consumption can be related in the equation where income is equal to the sum of savings and expenditure (consumption) 22. Identify the primary determinants of planned investment. The primary determinants of a planned investment include the expected return from investments, the taxation of returns, the cost of capital in relation to interest rate and the ease of use of savings to meet investments 23. Discuss ways in which indirect crowding out and direct expenditures offsets can reduce the effectiveness of fiscal policy actions. Inflation has an indirect outcome on international competitiveness. As prices increase, products tend to be more expensive relative to foreign products. This will result to reduced demand for exports as compared to imports. Net export being a parameter of aggregate demand will contracts GDP and partly offsets the expansionary fiscal policy. Expansionary fiscal policy makes interest rates to increase because the government must borrow to finance the increased deficit. The government raises revenues through taxes or borrowing. Hence, as the interest increases, private investment decreases. In the short run, it will decrease private investment demand, a parameter of aggregate demand and this will effectively lower GDP. Describe how certain aspects of fiscal policy function as automatic stabilizers for the economy. Automatic stabilizers are programs that automatically increase fiscal policy during recessions and contract it during booms. Unemployment insurance is an exemplar of automatic stabilizer in that the government spends more money for the period of recessions when unemployment rate is high. Equally, taxes are roughly proportional to profits and wages; hence, the size of taxes collected is higher during boom than recession. 25. Explain how federal government budget deficits occur. Federal government deficit occurs when it pays out more money than it can receive 26. Define the public debt and understand alternative measures of the public debt. Public debt refers to the credit or money owed by any echelon of government; federal government, central government and municipal government or local government. The debt is seen as an absolute number and can therefore measured as a percentage of the GDP. Alternatively, it can be measured by the amount owed in any given year. 27. Define the fundamental functions of money. Money can be described in terms of its core functions that are; it act as a medium of exchange, store of value and as a unit of account. 28. Identify key properties that any good that functions as money must possess. Properties of money is that it should be able to serve as (1) means of exchange (2) a enumerative (3)a source of liquidity and (4) store of value 29. Describe how the Federal Reserve assesses reserve requirements on banks and other depository institutions. The reserve requirement is a bank rule that puts the minimum reserves each bank must hold to customer notes and deposits. The reserves are meant to assure withdrawal demands. Federal Reserve approval is essential to begin any foreign banking institution in the US. Foreign banks need acquire regulatory approval from the OCC or the state banking supervisor when establishing new branches and agencies. Banks that are federally licensed must deposit cash or suitable securities at approved depository to convince the capital equivalency requirements specified by the IBA 30. Explain why the money supply changes when someone deposits in a depository institution a check drawn on the Federal Reserve System. The Federal Reserve buys and sells government securities. These, increases or decreases banks capabilities of making loans. This equally decreases or increases interest rates. If Federal Reserve sells a bond, an institution or individual buys the bond with a debit on their account and transfers the funds to the Federal Reserve. The Federal Reserve removes an equivalent amount from the bank reserve of the customer. The bank will then take away the equivalent amount from the customer’s account who bought the bond. This will decrease money supply and increase interest rates. The trend changes when the Federal Reserve decides to buy a bond 31. Identify the key factors that influence the quantity of money that people desire to hold. Motives for holding money, which can be expressed as factors that influence people to hold money, are transaction motives, precautionary motives and speculative motives 32. Describe how the Federal Reserves Tools of monetary policy influence market interest rates. The Federal Reserve buys and sells government securities. These increases or decreases banks capabilities of making loans. This equally decreases or increases interest rates. If Federal Reserve sells a bond, an institution or individual buys the bond with a debit on their account and transfers the funds to the Federal Reserve. The Federal Reserve then removes an equivalent amount from the bank reserve of the customer. The bank will then take away the equivalent amount from the customer’s account who bought the bond. This will decrease money supply and increase interest rates. The trend changes when the Federal Reserve decides to buy a bond 33. Explain why the actual unemployment might depart from the natural rate of unemployment. The departure of the natural and actual rates of unemployment is a sign of the business cycle. The stages when actual unemployment exceeds the natural unemployment are times of recession or early stages of economic recovery. The stages when actual rate is below the natural are times of a booming economy 34. Describe why there may be an inverse relationship between the inflation rate and the unemployment rate, reflected by the Phillips curve. The inverse relationship in the Philips curve can be explained well when you consider that with high unemployment laborers would accept lower wages and this would reduce firms’ cost. High wages bring about high inflation and the lower the rate of unemployment, the higher the rate of inflation and vice versa. 35. Explain why population growth can have uncertain effect on economic growth. There is no clear-cut explanation of the effect of population growth on economic growth. It can be argued that high population growth creates pressures on limited natural resources, decreases public and private capital formation and redirects counts to maintaining relative to increasing the stock of capital per worker. It can also have affirmative effects like economies of scale and specialization. Describe how government inefficiencies have contributed to the creation of relatively large quantities of dead capital in the worlds developing nations. Government poor policies make capital investment impossible. The government tends to involve in the production of consumption goods that are less important. The rate at which the economy can absorb extra human capital is low and therefore it leaves the available resource idle. The government is also not receptive to new technology whish is important in the formation of capital. Discuss the worldwide importance of international trade. International trade is very crucial for the development of a country in that it expands the choices that could otherwise been limited to what can be produced locally. Thus, countries can access goods and services cheaply from abroad. Labor can also be obtained cheaply in some countries. Cheap labor reduces production costs and this will have effect to low prices to the final product. Therefore, countries can import final product at a much lower price compared to when produced locally where labor is very expensive. Explain why nations can gain from specializing in production and engaging in international trade. A country specializing in the production of goods which it has comparative advantage will profit and it will trade for goods which it does not have comparative advantage. Therefore, free trade will make a country to use its resources efficiently. Efficient use of resources will increase the amount of goods available for production and consumption. Hence, the benefits of trade will be the outcome of specialization 39. Distinguish between the balance of trade and the balance of payments. The balance refers to discrepancy between a county’s exports and imports and it is the major part of a country’s balance of payments, which is an accounting report of the economic transactions that have taken place stuck between the inhabitants of one country and the inhabitants of other country over a particular period. 40. Identify the key accounts within the balance of payments. Key accounts within the balance of payments are current account, capital account and financial account. References Ariel, R. Lecture Notes in Microeconomic Theory: The Economic Agent. New York: Princeton University Press, 2006

Is Man Naturally Evil Essay Example for Free

Is Man Naturally Evil Essay Hsà ¼n Tzu says that man’s nature is naturally evil. Hsà ¼n Tzu wrote Man’s Nature is Evil in the year 300 BCE. Tzu thought that man’s nature is naturally evil and needs to be taught by a teacher to overcome this. He Mencius has not completely understood what man’s nature really is. Tzu also believes that if a man lacks something in himself that they go to look for whatever they lack in someone else. The last thing he talks about is how to differentiate between good and evil. Hsà ¼n Tzu’s belief that man’s nature is naturally evil is partially true, he does not believe in Mencius’s view whatsoever, Tzu believes that man looks for those attributes that he does not have in other people, and he also expresses the difference between good and evil. Tzu’s reasons apply to people in current day life because when people are born they do not know right from wrong, and I believe he is right when he says people look for attributes they lack themselves in others around them. Man’s nature is naturally evil according to Hsà ¼n Tzu; therefore man needs a teacher to guide him towards what is good. Tzu states in his writing, â€Å"A warped piece of wood must wait until it has been laid against the straightening board, steamed, and forced into shape before it can become straight; a piece of blunt metal must wait until it has been whetted on a grindstone before it can become sharp (pg. 101).† When Mencius is talking about this quote it means that a person does not start their life being the perfect human being. Everyone needs a teacher, leader, or mentor to show him or her the right and good way of doing things. When a person grows up without having some to look over them and guide them in the right direction they may start to go into the wrong direction. People need that mentor there to help them when they do not know what the right thing to may be. Then Hsà ¼n Tzu says, â€Å"Hence, today any man who takes to heart the instructions of his teacher, applies himself to his studies, and abides by ritual principles may become a gentleman, but anyone who gives free rein to his emotional nature, is content to indulge his passions, and disregards ritual principles becomes a petty man (pg. 101).† This statement by Tzu means that every man should listen to every word that his or her mentor gives them and never forget them. These words of advice that a person’s teacher gives them are going to help them achieve all of their goals for the rest of their lives. These wise  words from the mentors will make a man become good for the rest of their life. Hsà ¼n Tzu also states that if a man does not listen to the words of their mentor they will never be able to know what being good feels like. These people will live their entire lives going towards evil and will never be able to change it without the help of a mentor. I agree with Tzu on this topic because if it was not for our teachers and mentors people would be causing trouble all of the time. Hsà ¼n Tzu does not agree with Mencius’s thought on this subject matter. Tzu states that, â€Å"Mencius states that man is capable of learning because his nature is good, but I say that is wrong. It indicates that he has not really understood man’s nature nor distinguished between the basic nature and conscious activity (pg. 101).† Tzu explains basic nature as something that is just given to you by heaven when you are born. On the other hand, conscious activity is the things that are taught to people and that they learn from their mentors. The way Hsà ¼n Tzu explains basic nature and conscious activity is, â€Å"That part of man which cannot be learned or acquired by effort is called the nature; that part of him which can be acquired by learning and brought to completion by effort is called activity. This is the difference between nature and conscious activity (pg. 101).† Hsà ¼n Tzu speaks about how man does not have every quality, but he will strive to get as many qualities as he can no matter what the circumstances are. Tzu makes a statement that says, â€Å"A man whose accomplishments are meager longs for greatness; an ugly man longs for beauty; a man in cramped quarters longs for greatness; a poor man longs for wealth; a humble man longs for eminence. Whatever a man lacks in himself he will seek outside. But if a man is already rich, he will not long for wealth, and if he is already eminent, he will not long for greater power. What a man already possesses himself he will not bother to look for outside (pg. 103).† When Hsà ¼n Tzu says this he means that when someone does not have a quality that they want or may need they go and try to take that quality they are seeking from another person. I believe this happens because people are insecure about themselves and need to take things from others to make themselves feel good about themselves. Tzu the says, â€Å"Hence, man in the state in which he is born neither possesses nor understands ritual principles. If he does not  possess ritual principles, his behavior will be chaotic, and if he does not understand them, he will be wild and irresponsible. In fact, therefore, man in the state in which he is born possesses this tendency towards chaos and irresponsibility (pg. 103).† This is showing that Tzu thinks when a person is born they do not yet understand what ritual principles are and they believe they can do anything they want to do. Hsà ¼n Tzu then follows this by saying, â€Å"From this it is obvious, then, that man’s nature is evil, and that his goodness is the result of conscious activity (pg. 103).† I completely agree with Tzu’s theory on this concept because I believe this is the reason why some people feel the need to bully others. Hsà ¼n Tzu then talks about the distinction between good and evil. Tzu says, â€Å"All men in the world, past and present, agree in defining goodness as that which is upright, reasonable, and orderly, and evil as that which is prejudiced, irresponsible, and chaotic (pg.103).† Hsà ¼n defines the difference between being good and being evil. The way to be good in Tzu’s head is be accepting of other thoughts even if they do not make complete sense. I believe Tzu means that to be good people need to give everyone a chance no matter what their thoughts are. Tzu then goes on to talk about being evil. I believe that from what Tzu says being evil is judging a person by how he or she looks. Another way of being evil that I got out of this is that if someone does something wrong they try to go and blame it on someone else. Another thing that Hsà ¼n Tzu says is, â€Å"Therefore, in ancient times the sages, realizing that man’s nature is evil, that it is prejudiced and not upright, irresponsible and lacking in order, for this reason established the authority of the ruler to control it, elucidated ritual principles to transform it, set up laws and standards to correct it, and meted out strict punishments to restrain it (pg. 104).† This is a great statement mad by Tzu because it explains that without people leading us we would resort to doing all things evil. The sages knew that man’s nature was evil so they set up laws and rulers to restrict people from being evil and making them resort to being good. In my own life I had to be taught the difference between good and evil. I was born not knowing the difference between the two. My parents were a huge part of teaching me the difference between being good and not being evil. They were they to tell me when I was doing something wrong. After they told me that I did something wrong they would always try and help me correct it to the best of their ability. I also had all of my teachers growing up there to teach me things about being good that my parents did not teach me. I also had positive role models to look up to and hope to achieve what they did when I was growing up. I always wanted to be like Derek Jeter when I was growing up as a kid. He was my biggest inspiration out of any famous sports star. He was just a regular kid like me, and with the help of his parents, teachers, and role models he got to where he is today. Now he is a role model and inspiration for children all over the world. I believe that Hsà ¼n Tzu’s theory that what a man does not have in himself in looks for in others is a very true theory. I believe this has a lot to do with bullying. When a person bullies another human being I would say it is because they are insecure about themselves. The bullying of another helps that person feel more complete and better about him or herself. This is also another reason why we need teachers; they help us avoid doing this type of thing. Teachers are always going to be there to tell a person to stop doing something like this and correct them. In conclusion, I completely agree with Hsà ¼n Tzu’s ideas. Man’s nature is evil when he or she is born, and when the person is growing up they learn what is good through their parents, teachers, and mentors. Tzu talks about how Mencius does not fully understand what man’s nature is, and I agree with Hsà ¼n Tzu. I love Tzu’s idea of how if a man lacks a quality in himself he will go out and look for that quality in someone else. I agree with how Hsà ¼n Tzu defines the difference between good and evil. I was able to relate his theory of man being born with an evil nature by saying how my parents, teachers, and role models taught me what is right from wrong. I also see, in real life, people are always trying to get attributes that they lack themselves from other people around them. I believe that Hsà ¼n Tzu is a very intelligent man and I agree with his theories on human nature.

The Internal And External Validity And Reliability Psychology Essay

The Internal And External Validity And Reliability Psychology Essay This chapter contains a description of the research methodology proposed for this study, including a restatement of the purpose and research questions. The chapter is organized with categories pertaining to the instrumentation, data collection, research methodology, ethical concerns, and explanation of the statistical procedures used for a descriptive quantitative analysis. The purpose of this study is to examine the opinions and attitudes of the Colorado Mental Health Institutes clinical staff regarding the perceived value of the Crisis Prevention Institutes Nonviolent Crisis Intervention Program used to manage violence in the hospitals inpatient treatment settings. This will be accomplished through the use of a survey designed to assess the perceptions of those charged with providing direct care to the mentally ill population of the Institute regarding the effectiveness of the Crisis Prevention Institutes Nonviolent Crisis Intervention Program to prevent and manage violent behavior . Designing an attitudinal survey in order to quantify results can be a challenging task depending on what is being measured and selecting the appropriate assessment methodology. Most forms of assessment test large sample groups, with divergent sub-groups to contrast and compare in terms of scores (Thorndike Thorndike-Christ, 2009). The subject areas in the survey that will be used for this assessment are of a non-comparative nature, meaning that each item is scaled independently of the others as opposed to comparing them to each other. The numbers used in the scale will indicate the relative position of items, but not the magnitude of difference between them. With respect to these parameters and limitations, this study will present the survey scores of the participants, along with calculations as to their range and central tendency. In addition, inferences will be made as to factors that may have influenced the scoring choices made by the respondents. In the fields related to education and social science, research exploring the attitudes, feelings, and lived experiences of the respondents is often conducted through the use of a survey methodology. Research data gathered in this manner can be categorized into four types measuring scales containing different information that determines the method of statistical analysis (Stevens, 1946). Perhaps the simplest though least statistically descriptive measurement scale is termed a nominal scale, in which a name or number is assigned to the value of the data for identifying purposes. Numbers used in a nominal scale have no particular order, magnitude, or significance in value other than for the purpose of identification, and though this scale of measurement yields little in terms of detailed statistical information, there is less potential for error secondary to the simplicity its structure (Stevens, 1946). In contrast, an ordinal scale is a level of measurement that does provide a differentiation and value in the numerical assignment (Stevens, 1946). Values can be determined by the ranking the assigned numbers in either an increasing or decreasing fashion, dependent on the design and purpose of the research instrument. An example of this would be 5 point ordinal scale used for an assessment of pain utilizing an increasing design. The number 1 would indicate the least amount of pain experienced, with the number 5 ascribed to the highest level of pain experienced; and the numbers in between reflecting differences in experiential magnitude. Although in this example the level of pain would be indicated by the numerical assignment, the difference in the numbers in the ranking would not necessarily be equal or precise, and the differences between any two rating numbers would not indicate a specific interval. Thus, an ordinal scale may be considered to be a more sophisticated method for measu rement than a nominal scale, yet be less precise for in providing specific information in terms of magnitude than with other levels of measurement such as interval or ratio scales. Researchers seeking this type of information might use an interval scale, as there are equal spaces between any two values which will provide more specific data than with a nominal or ordinal scale. As the distance between any two positions on an interval scale is of a known size, this method allows for the use of arithmetic operations, and the scale might be used for measurements pertaining to temperature, dollars, out to for, nor anything in which there is a direct measurable quantity with equality in units (Stevens, 1946). As with temperature, zero does not represent the absolute lowest value, and therefore inferences regarding the ratios of data cannot be made as an interval scale does not have a true value of zero (Thorndike Thorndike-Christ, 2009). A level of measurement that does possess a true value of zero and has the property of ratios has some similarities to an interval scale, and is called a ratio scale. The corresponding ratios on the scale have the same meaning and th e value of zero absolute, as in a measurement of height and weight (Thorndike Thorndike-Christ, 2009). The ratio scale can provide more specific information than the other levels of measurement; however, its complexity can be a factor in terms of the potential for research error. All four of these levels of measurement can be used singly and at times conjunctively in the design of a rating scale instrument dependent on the type of research being conducted. Therefore, the selection of a particular level of measurement is a fundamental concern for the researcher, as the success or failure of a research endeavor may lie in making an appropriate choice, as the subsequent types statistical analyses for each are varied and differentiated. Likert and Likert-Type Rating Scales The level of measurement most appropriate for this quantitative statistical study is an ordinal scale. As the focus of this study is on staff members attitudes, trying to render subjective and what might be considered qualitative data into quantitative measurements requires a method for categorizing responses. At the same time, care must be given in considering whether a particular scale item can be measured in terms of the distances between any two numbers in the rating scale. In 1932 Rensis Likert created and developed a methodology often used to assess feelings, attitudes, and opinions by providing a rating scale structure that addressed this concern (Likert, 1932). This method has widely utilized and adapted in many venues including education, social science, marketing, and a variety of other applications with empirical research evidence that confirms its reliability and validity (Abdel-Khalek, 1998; Chow Winzer, 1992; Maurer Andrews, 2000). This evidence further suggests that r ating bias is reduced and the reliability of the rating is highest when a 5 or 7 point or higher rating scale is used (Stennet, 2002). As a result, a typical Likert scale typically has 5 to 7 categories with 3 or 4 point scales often considered too few, particularly when parametric statistical methods are applied (Garson, 2002). The categories in a 5-point Likert scale is often coded as 1- Strongly Disagree, 2 Disagree, 3 -Neutral, 4 Agree, and 5 Strongly Agree, with percentage and nonparametric statistics used for analysis. The simplest form of Likert scale is analyzed in a summative manner; with the mean value of a Likert-item found by adding the number of responses to a Likert-item and dividing it by the number of points used for the rating scale. Whether or not Likert scales can or should be analyzed using parametric versus nonparametric tests is a source of ongoing controversy within the statistical community (Acock Martin, 1974). Efforts to quantify responses using paramet ric tests have led to an adaptation in scale design from the classic Likert model, to what is termed a Likert-type scale (Clason Dormody, 1994). A Likert-type scale differs from a Likert scale in the statement questions being singular in the response alternatives, allowing for the data to be treated as interval scale data for parametric statistical analysis (Brown, 2000; Clason Dormody, 1994; Cliff, 1984; Hodgson, 2003). With this approach, the mean score of Likert-type data from each question or statement could be compared using a t -test, though factors related to data distribution, sample size, and number of rating choices would need to be considered (Clason Dormody, 1994). This translation of ordinal rating scale data into that of an interval scale for the use of parametric statistical methods underscores the controversy identified by Acock Martin, 1974). As previously described in the levels of measurement, ordinal scales are ranked with no specific measurable difference or distance between the numerical categories, and statistical calculations used to determine the mean, standard deviation, and patterns of correlatio n may result in inaccurate research findings (Harwell Gatti, 2001; Miller, 1998). In the classic Likert scale design numbers to provide order and ranking, but since the actual distance and origin between the numbers is unknown, then it cannot be scored in an additive manner save to indicate the central tendency and range of the responses (Dawes, 2008). This supports the contention that non-parametric test should be used for a quantitative analysis, though it could be argued there are methods that would be more statistically accurate and valid, such as ordinal regression techniques (McCullagh, 1980). Furthermore, the calculation of the mean scores for the ordinal data would need to be established in order to be statistically valid in a analysis using parametric tests (Trochim, 2006), whereas those arguing against this approach contend that the median but not the mean can serve as a measure of central tendency (Trochim, 2006). For this study, the calculations for will exclude the mea n, though the mode, median, and range of the score distribution will be presented. Data Analysis A descriptive quantitative research methodology will be used for this study through the use of a survey that was designed to collect data from the direct care providers at the Colorado Mental Health Institute. A survey methodology is often used for data collection from a specific population or from a sample of the population (Robson, 1993). Within the realm of psychology, surveys are used for gathering data about individuals, groups and organizations, and larger social networks (Rossi, Wright, and Anderson, 1983). Most Americans have participated in some form of survey in an either online or in a paper format whether in an educational, social science, political, or marketing research context. Many organizations have employees participate in satisfaction surveys, and surveys in general have become a sort of social barometer for monitoring the publics attitudes and opinions. Often surveys target a specific population, with a sample survey focusing on subgroups determined by a variety o f factors such as gender, race, geography, political beliefs etc. dependent on the nature and focus of the subject areas studied (Rossi, Wright and Anderson, 1983). The advantages and strengths of using a survey methodology for gathering information are that they can be of a qualitative or quantitative design, and be easily administered to gather information quickly and inexpensively (Leary , 1995). In the past, this was frequently accomplished through the use of paper and mailed surveys, with the latter method used particularly when large populations were being surveyed. With advances in communication and digital technology, surveys can be conduct via electronic formats as varied as those associated with phones and computers. Other frequently used research methodologies such as personal interviews can be more time and cost intensive than with the use of a survey instrument, and anonymity and confidentiality of the respondents can be more difficult to control. These factors strongly influenced the researchers choice of a descriptive research methodology utilizing a survey instrument to assess the Colorado Mental Health institutes clinical employ ees attitudes, feelings, and lived experiences related to the crisis intervention training program the organization has utilized for 25 years. Few attitudinal surveys have been conducted regarding this specific subject area, and a review of the literature did not reveal any studies concerning the long-term impact of this type of training on the culture of a mental health organization. The Colorado Mental Health Institutes 2008 Safety Survey Another key factor that sponsored this researchers interest in designing and administering an attitudinal survey was a review of a safety survey conducted at the Colorado Mental Health Institute in 2008. The Colorado Mental Health Institute currently uses a survey methodology for exit interviews with clients that are discharging from the facility, as well as surveys designed to gauge employees job satisfaction. The Institute has only conducted one survey that concerned the subject area of crisis intervention training being focused on in the proposed study for this dissertation. The purpose of the survey was stated thusly: In light of the high number of patient to staff assaults in fiscal year 07-08, the hospital focused the annual Failure Mode Effects and Analysis on the Management of Assaultive Patients, and assembled a workgroup to perform the analysis. The hospital director suggested a staff survey specific to perceptions of safety to be done as part of the work on reducing assaul ts (Colorado Mental Health Institute Safety Survey, 2008). Although the survey provided some interesting results, there was no data regarding the internal and validity of the survey instrument. Thus, the results are highly questionable in terms of these factors, and the survey cannot be considered quantitatively accurate, though it can provide useful information for developing a more scientifically accurate instrument by analyzing its improper design. It is important to note that in 2008 the Colorado Mental Health Institute had eight treatment units as opposed to the four that currently provide service for adults, with the closure of geriatric, adolescent, and children services in recent years. 2008 Survey Methodology There were approximately 240 surveys distributed to the direct care staff members, with 224 surveys submitted by participants indicating a 93% return rate. The survey focused on the aggregated responses of nurses, Mental Health Clinicians, and Public Safety Officers (security) as the providers with the most direct care contact. The survey used a 5 point Likert scale shown below: Table 1. 1 2 3 4 5 Strongly Disagree Disagree Neutral Agree Strongly Agree The safety survey was comprised of four questions: I feel safe working with patients on my unit. I feel safe when I float to another unit. Crisis management training is useful/helpful in preparing me to deal effectively with agitated and escalated patients. I feel adequately trained to deal with assaultive patients. There was one open-ended question, asking What further training do you feel would be beneficial to prepare you to work with the various patient populations at the Colorado Mental Health Institute and the assault risks they present? Table 2. Colorado Mental Health Institute Safety Survey, 2008. The survey presented tables illustrating findings specific to each treatment unit similar to the one above. They are not included in this study for the sake of brevity, however, it is important to note that there was some disparity between the different populations responding to this survey and a slight difference between the teams and disciplines. These differences were small enough to lend credence to the aggregate results. Overall, the highest scored variable was I feel adequately trained to deal with assaultive patients at 3.96. The lowest scored variable was I feel safe when I float to another unit, at 3.21. CMT is useful/helpful in preparing meà ¢Ã¢â€š ¬Ã‚ ¦ registered at a middle value at 3.21. All of the scores ranged between neutral and agree, and appear to have been derived using a summative method. The following tables further illustrate these findings (Colorado Mental Health Institute Safety Survey, 2008): Table 3. Table 4. There were only twenty responses to the open-ended question, What further training do you feel would be beneficial to prepare you to work with the various patient populations at the Colorado Mental Health Institute and the assault risks they present? Some of the responses did not specifically address training, for instance; several respondents said they needed more staff. Other respondents asked for training specific to patient populations, age group, and diagnoses. Several respondents stated that there should be an orientation to any units before floating (i.e. working on unfamiliar units). In addition, some respondents felt that they just needed more training, or more practice. Analysis of the 2008 Safety Survey Considering that this survey uses a 5 point scale the variable indicating 3.21 when employees float might have to do with the reaction of working in a different treatment setting with patients, staff, and conditions with which the employee is unfamiliar. The 3.96 rating ascribed to feeling adequately trained is relatively high, though there is a disparity when contrasted with the 3.21 rating of the perception of crisis management training being useful. The fact that all the readings are neutral or higher would support the contention found in the literature review that some form of crisis management training is more beneficial and preferable to having none at all. The middle score for crisis management training and the tenor of some of the individual comments suggest a performance gap with regards to the training process. This may have had to do with the crisis management training approach, the amount of practice and experience an employee has with using the techniques, or the assessm ent methods utilized to evaluate employee competency. However, these inferences are merely based on conjecture as the reliability and validity of the research instrument was not established. In addition, using only four Likert-items the survey design seems too limited in scope to gather a comprehensive overview of the employees attitudes and opinions. Therefore, the results are subject to interpretation, lacking in specificity and clarity, and cannot be considered as valid and reliable empirical evidence. Data Analysis Methods for the Proposed Survey The data analysis for the proposed survey for this study will begin by examining the surveys for correctness and completeness, and then numerically coding the responses into a database in the PASW-18 software (Predictive Analysis Software) and performing an analysis of descriptive responses. Surveys that are incomplete will be were discarded from the analysis, and the frequency tables and descriptive statistics will display the results relevant to answering the research questions. As described previously, the calculations will exclude the mean, though the mode, median, and range of the score distribution will be presented. A Chi-square test will conducted to determine if a relationship exists between frequencies, although it will not indicate the strength or positive/negative direction of the relationship. This is consistent with standard statistics guidelines for using the non-parametric tests that will be used in this study as opposed to parametric tests; for as Jamieson (2004) adv ises, the appropriate inferential statistics for ordinal data are those employing non-parametric tests, such as chi-squared, Spearmans Rho, or the Mann-Whitney U-test1 because parametric tests require data of interval or ratio level (p. 2113). As the numbers in the survey that will be assigned to Likert-items fall into the ordinal measurement scale, the descriptive statistics will include a mode or median for central tendency and frequencies for variability, and the inferential non-parametric tests will follow Jameisons (2004) recommendations, including Spearman s Rho to detect linear relationships and Kendalls tau-b for any increasing or decreasing relationship between the Likert scale questions. Data Collection Crisis intervention training is mandated for those staff members at the Colorado Mental Health Institute that provide direct care for clients residing in inpatient settings. In addition, those members in the Institutes administration that oversee this care are also involved in biannual trainings. Therefore, the sample population will consist of 210 clinical staff members, with the surveys distributed in the upcoming training review for the clinical staff members at the Institute. Although attendance for this training is mandated for employees, it will be made clear that participation in the survey is voluntary, with the anonymity of the participants made clear to addressing the issues regarding confidentiality. The respondents will be assured that the survey is anonymous and confidential, though they will be given the opportunity to provide information regarding their respective disciplines, years of service, level of education, and gender. Once the data has been collected, the resul ts will be recorded and statistically analyzed using PASW-18 software. Prior to the distribution of the surveys during training review, the purpose and importance of the study will be announced in each of the treatment units team meetings, and posted for all clinical staff members via the Institutes intranet e-mail service. Research Questions/Hypotheses _____ Describes specific research questions and hypotheses (where appropriate) that _____ Are clear and succinct _____ Are congruent with the Statement of Problem _____ Are answerable/testable _____ Correspond to the number of variables of interest _____ Have hypotheses that correspond to research questions _____ Are clearly stated _____ Are open-ended (not yes/no questions) Population and Sample The sampling frame for the survey consists of 210 members of the Institutes direct care staff, whose treatment teams multidisciplinary structure are comprised of management staff, nurses, social workers, psychiatrists, psychologists, therapeutic recreation specialists, occupational therapists and mental health clinicians. Although these disciplines function within a team context, there are differences in terms of power and status, as well as their amount of direct client care. Examples of these differences in station are the administrators, psychologists, and psychiatrists that comprise the upper echelon within the teams, with middle managers functioning as liaisons between the lower ranking team members and those higher up in the organization. The social workers on the team have a middling status with regards to power and prestige; with nurses and mental health clinicians representing the lowest status with the greatest amount of patient contact, though having the least contact with the hospital administration. Although this last factor is interesting from an organizational point of view, it is even more relevant in terms of the study as those staff members having the most direct contact with clients are the most likely to encounter and intervene in violent situations occurring on the inpatient units. Ethical Concerns There are ethical concerns inherent in any form of research study, particularly those involving the use of human subjects. To address these, procedures for protecting confidential and anonymity in data collection, analysis, reporting, and storage need to be developed and described. The researcher must be competent to perform the research procedures in order to reduce the risk of causing harm to human subjects, and the reputation of the sponsoring organization as well as the organization were the study is being conducted (Welman et al., 2005:182). For this proposed study, the researcher has completed the coursework for the Doctoral Program in Organizational Psychology at the University of the Rockies. This course of study has been grounded in the orientation and practice of conducting research, utilizing different kinds of research methodologies, undergoing training relative to conducting legal, ethical, and appropriate research procedures, and applying qualitative and quantitative an alysis in a variety of projects under the tutelage of qualified instructors at the doctoral level of education. There are a number of safeguards implemented by the University the Rockies to ensure that ethical concerns are addressed in an appropriate manner, including a requirement that the student completes two courses related exclusively to proper conduct and methodology in the research process, as well as the ethical research guidelines that need to be understood and followed. Throughout this training, the importance of the researchers work needing to be authentic and built upon his or hers own ideas have been emphasized, citing the use of other peoples ideas and data to avoid plagiarism. In addition, it has been made clear that providing data that is falsified or misleading is inappropriate and unethical. To ensure appropriate ethical standards are followed, student researchers at the University the Rockies are supervised by a committee of three psychologists, one serving as the committee chairman who works closely with the student. Finally, if the committee supports and approves the research proposal, it is reviewed by the Universitys Research Review Board and Institutional Review Board to ensure that the proposed study is original, contributes to the body of work in the field of psychology, and is held to the highest ethical standards. Factors related to the fairness of the proposed survey pose some ethical considerations. It is important that respondents understand the language used in the survey, and efforts have been made to make sure that each item is clear and easily understood. The specificity and clarity of the survey items was tested in the pilot study to assess if the respondents knowledgeable in the subject area interpreted each item in the intended way, and that this intention is made clear. The survey items are of a relatively simple construction reviewing concepts revisited frequently throughout the training process. Efforts have been made to design a survey that meets the validity and reliability standards discussed The possibility of ethical concerns arising for the respondents in this proposed study are reduced secondary to the anonymous and confidential nature of the survey; and that the previously, and the survey will be conducted with the same time parameters and conditions for all participants. voluntary participants being surveyed are employees as opposed to the Institutes clientele. Nevertheless, individuals participating in the survey may question the viability of keeping this information confidential, and worry that an honest and full disclosure of their views and feelings regarding the subject area may negatively impact their status within the organization. Efforts will be made to neutralize this factor by giving the respondents an accurate description of the study, and pointing out the potential benefits for the organization by improving the welfare and safety the Colorado Mental Health Institutes clients, as well as those charged with the responsibility of providing their care. The results of the study will be made available to all members of the Colorado Mental Health Institute, including any results that are associated with researcher error. Instrumentation The survey proposed for this study was designed to gather data based on the proposed research questions, and provide information to make appropriate conclusions and inferences based on empirical data. The instrument was designed to measure each respondents opinions, attitudes, lived experiences regarding the perceived value and effectiveness of the Crisis Prevention Institutes Nonviolent Crisis Intervention Program to manage violence. The attitudinal scale that will be used in the study will be based on a Likert scale, which is often used as a form of summative scale. The design is formatted using a variety of Likert scales with statements that the respondent evaluates by expressing their general level of agreement or disagreement. The scales proposed for this study to assess respondents perceptions of the Crisis Prevention Institutes Nonviolent Crisis Intervention Program effectiveness will use a 5-point Likert design. The survey is anonymous and voluntary with no identifying inform ation, though clarifying information such as gender, years of service, occupation, and years of education will be requested. The Likert-items for the survey targeted three general areas: 1) training objectives and content, 2) method and training context, and 3) usefulness and knowledge transfer. In the first category, 8 Likert-items refer to specific aspects and components in the training process. The second category contains 7 Likert-items that concerns applications of the training outside of the training event, as well as how it integrates with other training initiatives sponsored by the Colorado Mental Health Institute. The third and final category contains 6 Likert-items that are designed to explore employee attitudes regarding the training in terms of its relevance and utilization in real-life situations. Table 4. shows the rating scale that is used consistently throughout the survey, and for each of the three described categories. Table 4. Rating Scale. 1 2 3 4 5 Strongly Agree Agree Neither Agree or Disagree Disagree Strongly Disagree The survey has been reviewed by a panel of experts (committee members), who offered recommendations to make the Likert-items more specific and measurable, and then was administered to a screening sample of five people comprised of subjects similar to those who will eventually participate in the survey for this study. The inclusion of the neutral Neither Agree or Disagree category was included to avoid forcing the respondents to choose a response. The numbers of choices on a 5-point scale will present an odd number of choices, allowing respondents to remain neutral. The decision on whether or not to include a neutral category in a survey has been debated, with a decision either way potentially impacting the assessment results (Mogey, 1999). The participants in the screening/pilot sample will be excluded from the final pool of respondents for the survey, which was designed to be completed no more than 10 minutes of time. Some of the considerations in constructing the survey include res pondents possibly being influenced by the way they have answered previous questions, in terms of establishing a pattern that they feel the need to break. In addition, some members may desire to take extreme options but instead temper their responses with more moderate ones. This can be sometimes a challenge in terms of testing in a psychologically oriented environment, where participants are adept at finding and arguing dichotomous and often opposing viewpoints. Internal and External Validity Establishing the reliability and validity of the survey instrument proposed for this research study is fundamental as it is created as opposed to a published instrument. Suskie (1996) describes a questionnaire or survey as reliable when it elicits consistent responses from the participants, and this can be accomplished by providin

A Comparison of The Chrysalids and 1984 :: comparison compare contrast essays

   A comparison of life in London, Air Strip One (or Great Britain) in the George Orwell novel '1984' and Waknuk, Canada in the John Wyndham novel 'The Chrysalids.' Waknuk is a society living after a nuclear attack. The people of Air Strip One (or Britain) in 1984 live in a dictatorship controlled by "The Party".      Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Waknuck is an enclosed society similar to Victorian Britain. As people spend all their lives in the town or city they are born they can't experience different cultures and therefore have a lack of tolerance and understanding for differences in the lifestyles of these cultures. The lack of experience of different cultures is not the reason for a lack of a true understanding of these cultures in 1984. The people of London are effectively poisoned against such cultures by the Party and so have no reason to want to experience them.  Ã‚        Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Waknuck is also based largely on Religion - it is a Christian society. Most of the prejudices are formed from the Bible. Any creature that is against "the true image of God" (or a mutant) is called a Blasphemy. The Christian religion (and indeed other religions) have been the source of numerous prejudices in modern society in Britain (for example sexism and homophobia) and indeed conflicts (for example the conflicts between the Republic and Northern Ireland). In the novel '1984' no-one follows a religion as such, as far as the people of Britain in 1984 are concerned there is no God, the complete opposite of the radical religious views of the people of Waknuk. Most people in Waknuk have been 'brainwashed' by Christianity in the same way many people in Great Britain in 1984 have been 'brainwashed' by the party and Big Brother. Each use repetitive slogans, in 1984 such slogans as: "War is peace. Freedom is slavery. Ignorance is strength." are used and more subtly in Christianity in the form of prays and commandments. The Party and Christians each worship a figure, Big Brother and God respectively, neither people can be completely sure of   there presence but convince themselves that they exist nevertheless. The power lies with the Party in 1984 but lies with the church in Waknuk.         Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The people of Waknuk are unable to comprehend theories such as the Evolution Theory dispute finding fossils and other evidence that would conflict with Genesis.

Can One Perceive Or Confirm The Existence Of An Idea Or Object That Is :: essays research papers

Can One Perceive Or Confirm The Existence Of An Idea Or Object That Is External To Him Mainly - God? "I think therefore I am." Man wills, refuses, perceives, understands, and denies many principles. As explained by Rene' Descartes, man is a thinking thing, a conscious being who truthfully exists because he is certain that it is so. All that man perceives is internally present and not external to him or his mind. The focal point of the third meditation that must be dealt with is: Can one perceive or confirm the existence of an idea or object that is external to him mainly - God? There are three ways, Descartes explains, that one may come to the conclusion of an objects existence. The first is through nature. The second is through feeling an object independent of one's will, for example; heat and cold. The third, and most elaborated upon is the point of cause and effect, or more simply, the objective reality of an idea. We will primarily deal with the third reason of cause and effect. Descartes brings some examples to demonstrate his cause and effect theory. More importantly, is the logic that lies behind the actual theory. The rationale that an object will have an effect is only if it stems from a legitimate cause. A stone, for example, cannot be perceived accurately if there isn't an initial idea preceding with equal or superior properties in one's intellect. The mind generates ideas and develops reality through previous schema or beliefs as Descartes states: "And although an idea may give rise to another idea, this regress cannot, nevertheless, be infinite;we must in the end reach a first idea, the cause of which is, as it were, the archetype in which all the reality that is found objectively in these ideas is contained formally." Additionally, properties such as color, sound, heat, and cold are too complex in their nature for Descartes to determine whether they are true or false. In other words, are the ideas that one has about a property true or false? Consequently, Descartes concludes that there is a common element between examples like the stone and the cold. The cold portraying the unreal or false object and the stone as a true object. He contends that they both contain "substance" like man himself, and are therefore similar. The only difficulty that arises is the consideration of God's existence. There is no substance or idea for the notion of God to originate from. The valid question that Descartes asks is: Is it conceivable that a finite being have the idea of an infinite existence?

Religious Ceremonies In Theatre :: essays research papers fc

Theatre as a Religious Ceremony   Ã‚  Ã‚  Ã‚  Ã‚  Ã¢â‚¬Å"The drama in Greece was inextricably bound up with religious feeling and religious observance.† (Cheney 33) The citizens of the Greek states were the first European communities to raise dramatic performances to the level of an art. Furthermore, the Greek playwrights still exercise a potent creative force, and many modern dramatists find strong relationships between these legendary themes and modern conditions. The Greek’s religion is wholly responsible for the creation of all facets of early Greek theatre; whether it is the content of the plays, or the immense size of the theaters required to accommodate the attendance of the city’s men.   Ã‚  Ã‚  Ã‚  Ã‚  Although much is speculated about the origins of early Greek theater, it may be stated that the â€Å"source of tragedy is to be found in choric dithyrambs sung in honor of the god Dionysus† (Nicoll 9). The performance took place in an open-air theater. The word tragedy is derived from the term â€Å"tragedia† or â€Å"goat-song†, named for the goat skins the chorus wore in the performance. Originally these songs were improvised and rhapsodical as time passed by they were â€Å"poetized or rendered literary† (Nicoll 9). The word â€Å"chorus† meant â€Å"dance or â€Å"dancing ground†, which was how dance evolved into the drama. Members of the chorus were characters in the play that commented on the action. They drew the audience into the play and reflected the audience’s reactions. The change from freelance song to theatre was obtained at the hands of a Greek named Thespis. He turned what was originally a song lea der, or priest, into an actor whose words were answered by a chanting chorus. Thespis also â€Å"changed the subject matter of theatre events, expanding them to deal not solely on stories of Dionysus† (Nicoll 9). In the sixth century B.C., drama had been born in Greece and with the introduction of a second actor and later a third, this art form was ready to mature at the hands of Aeschylus, Sophocles, and Euripides.   Ã‚  Ã‚  Ã‚  Ã‚  These festivals grew in size and complexity, especially in Athens, where the largest of these festivals were held and only the premier playwrights released their plays. These prestigious and elaborate plays were performed at dramatic festivals. The two main festivals were the Feast of the Winepress in January and the City Dionysia at the end of March. The Proceeding began with the procession of choruses and actors of the three competing poets.

Dividend Policy Trends

Dividend Policy of Indian Corporate Firms: An Analysis of Trends and Determinants Dr. Y. Subba Reddy1 The present study examines the dividend behavior of Indian corporate firms over the period 1990 – 2001 and attempts to explain the observed behavior with the help of trade-off theory, and signaling hypothesis. Analysis of dividend trends for a large sample of stocks traded on the NSE and BSE indicate that the percentage of companies paying dividends has declined from 60. 5 percent in 1990 to 32. percent in 2001 and that only a few firms have consistently paid the same levels of dividends. Further, dividend-paying companies are more profitable, large in size and growth doesn’t seem to deter Indian firms from paying higher dividends. Analysis of influence of changes in tax regime on dividend behavior shows that the tradeoff or tax-preference theory does not appear to hold true in the Indian context. Test of signaling hypothesis reinforces the earlier findings that dividen d omissions have information content about future earnings. However, analysis of other non-extreme dividend events such as dividend reductions and non-reductions shows that current losses are an important determinant of dividend reductions for firms with established track record and that the incidence of dividend reduction is much more severe in the case of Indian firms compared to that of firms traded on the NYSE. Further, dividend changes appear to signal contemporaneous and lagged earnings performance rather than the future earnings performance. 1 Asst. Professor, Institute for Financial Management and Research (IFMR), Chennai. The views expressed and the approach suggested are of the authors and not necessarily of NSE. 1. Introduction From the practitioners’ viewpoint, dividend policy1 of a firm has implications for investors, managers and lenders and other stakeholders. For investors, dividends – whether declared today or accumulated and provided at a later date – are not only a means of regular income2, but also an important input in valuation of a firm3. Similarly, managers’ flexibility to invest in projects is also dependent on the amount of dividend that they can ffer to shareholders as more dividends may mean fewer funds available for investment. Lenders may also have interest in the amount of dividend a firm declares, as more the dividend paid less would be the amount available for servicing and redemption of their claims. However, in a perfect world as Modigliani and Miller (1961) have shown, investors may be indifferent about the amount of dividend as it has no influenc e on the value of a firm. Any investor can create a ‘home made dividend’ if required or can invest the proceeds of a dividend payment in additional shares as and when a company makes dividend payment. Similarly, managers may be indifferent as funds would be available or could be raised with out any flotation costs for all positive net present value projects. But in reality, dividends may matter, particularly in the context of differential tax treatment of dividends and capital gains. Very often dividends are taxed at a higher rate compared to capital gains. This implies that dividends may have negative consequences for investors4. Similarly, cost of raising funds is not insignificant and may well lead to lower payout, particularly when positive net present value projects are available. Apart from flotation costs, information asymmetry between managers and outside investors may also have implications for dividend policy. According to Myers and Majluf (1984), in the presence of information asymmetry and flotation costs, investment decisions made by managers are subject to the pecking order of financing choices available. Managers prefer retained earnings to debt and debt to equity flotation to finance the available projects. Information asymmetry between agents (managers) and principals (outside shareholders) may also lead to agency cost (Jensen and Meckling, 1976). One of the mechanisms o reducing expropriation of outside f shareholders by agents is high payout. High payout will result in reduction of free cash flow available to managers and this restricts the empire building efforts of managers. The presence of information asymmetry may a mean that managers need to signal their ability to lso generate higher earnings in future with the help of high dividend payouts (Bhattacharya, 1979, John and Williams 1985, and Miller and Rock, 1985). However, the credibility of signals depends on the cost of signaling – the cost being loss of financial flexibility. High payout results in reduction of free cash flow when in fact the firm needs more funds to pursue high growth opportunities. Rozeff (1994) models payout ratios as a function of three factors: flotation costs of external funding, agency cost of outside ownership and financing constraints as a result of higher operating and financial leverage5. To summarize, several theories have been proposed in explaining why companies pay dividends6. While many earlier studies point out the tax-preference theory, more recent studies emphasize signaling and agency cost rationale of dividend payments. However, the dividend puzzle is yet unresolved and the words of Brealey (1992) poses the dividend policy decision as â€Å"What is the effect of a change in cash dividends, given the firm’s capital-budgeting and borrowing decisions? † In other words, he looks at dividend policy in isolation and not as a by-product of other corporate financial decisions. 2 Lintner (1956) finds that firms pay regular and predictable dividends to investors, where as the earnings of corporate firms could be erratic. This implies that shareholders prefer smoothened dividend income. Bernstein (1998) observes that given the ‘concocted’ earnings estimates provided by firms, the low dividend payout induces reinvestment risk and earnings risk for the investors. 4 Black (1976) notes that in the presence of taxes, investors â€Å"prefer smaller dividends or no dividends at all†. 5 According to Kalay (1982), in the absence of restraining covenants, shareholders can transfer wealt h from bondholders by paying off dividend to themselves either by selling existing assets or by reducing investment or by using proceeds of a senior debt. 6 Baker, Powell and Veit (2002) survey different streams of research work on dividends. 2 Fischer Black (Black 1976) may well apply in today’s context: â€Å"The harder we look at the dividend picture, the more it seems like a puzzle, with pieces that just don’t fit together†. One of the striking aspects that have been noticed in recent periods is the lower dividend paid by corporate firms in the US. Fama and French (2001) analyze the issue of lower dividends paid by corporate firms over the period 1973-1999 and the factors responsible for such a decline. They attribute the decline to changing firm characteristics of size, earnings and growth. However, it is to be seen whether the change owards lower dividends is a permanent feature or will there be reversal. A decline in dividends, according to Fama and Frenc h, could be due to lower transaction costs, improved corporate governance mechanisms, and the increasing preference towards capital gains. 1. 1 Indian Scenario In the Indian context, a few studies have analyzed the dividend behavior of corporate firms. Mahapatra and Sahu (1993) find cash flow as a major determinant of dividend followed by net earnings. Bhat and Pandey (1994) undertake a survey of managers’ perceptions of dividend decision and find that managers perceive current earnings as the most significant factor. Narasimhan and Asha (1997) observe that the uniform tax rate of 10 percent on dividend as proposed by the Indian union budget 1997-98, alters the demand of investors in favor of high payouts. Mohanty (1999) finds that firms, which issued bonus shares, have either maintained the pre-bonus level or only decreased it marginally there by increasing the payout to shareholders. Narasimhan and Vijayalakshmi (2002) analyze the influence of ownership structure on dividend payout and find no influence of insider ownership on dividend behavior of firms. However, it is still not clear as to what is the dividend payment pattern of firms in India and why do they initiate and omit dividend payments or reduce or increase dividend payments. Hence it is proposed to analyze the dividend payout of firms in India and analyze the dividend initiations and omissions and other changes in dividends and the signals that these events convey. Following Fama and French (2001), the present study also attempts to analyze the impact of profitability, size and growth on the dividend payout of firms. Similarly, following Healy and Palepu (1988) an attempt is made to analyze the signaling hypothesis, i. e. arnings information conveyed by dividend initiations and omissions. Since, initiations and omissions construe extreme dividend events, changes in dividends i. e. , increases and decreases and the information that they convey is also examined following DeAngelo, DeAngelo and Skinner (1992). There have been several changes in the tax regime in the last few years. The union budget 1997-98 made dividends taxable at t e hands of company paying them and not in the hands of investors receiving them. h Similarly there have been changes in the capital gains tax and exemption of dividend income under Section 80 L of the Income Tax Act 1961. All these changes have implications for the dividend policy of corporate firms. According to tax-preference or trade-off theory, favorable dividends tax should lead to higher payouts. Hence it is proposed to analyze the impact of tax regimes on dividend policies of corporate firms. 1. 2 Objectives 1. To study the trends in the dividend payment pattern of Indian corporate firms; 2. To analyze the impact of changes in dividend tax on the propensity to pay dividends; 3. To analyze the influence of firm characteristics such as profitability, growth and size on the dividend payment pattern; 4. To analyze the signaling hypothesis, specifically earnings information conveyed by dividend initiations and omissions; and 5. To analyze the influence of loss on dividend reductions. 3 In other words, the present study focuses on an analysis of dividend trends and attempts to analyze the determinants of these trends with the help of trade-off or tax-preference theory and signaling hypothesis. There are other important determinants of dividend behavior such as transactions costs, which we will not analyze, in the present study. In the next Section, we review the relevant literature, followed by a description of the database employed and methodology adopted in Section 3. Dividend trends are discussed in Section 4, and the analysis of characteristics of dividend payers is presented in Section 5. Sections 6 and 7 deal with the signaling hypothesis: first the case of dividend initiations and omissions and second dividend reductions. Section 8 summarizes the finding of study, points out limitations and concludes with directions for further research. 2. Review of Relevant Literature DeAngelo, DeAngelo and Skinner (1992) analyses the relationship between dividends and losses and the information conveyed by dividend changes about the earnings performance. They examine the dividend behaviour of 167 NYSE firms with at least one annual loss during 1980-95 and those of 440 firms with no losses during the same period, where all the firms had a consistent track record of ten or more years of positive earnings and dividends. They find that 50. 9% of 167 firms with at least one loss during 1980-95 reduced dividends, compared to 1% of 440 firms without losses. Their findings support signaling hypothesis in that dividend changes improve the ability to predict future earnings performance. Glen et al. (1995) study the dividend policy of firms in emerging markets. They find that firms in these markets have a target dividend payout rate, but less concerned with volatility in dividends over time. They also find that shareholders and governments exert a great deal of influence on dividend policy and observe that dividends have little signaling content in these markets. Benartzi, Michaely, Thaler (1997) analyzes the issue of whether dividend changes signal the future or the past. For a sample of 7186 dividend announcements made by NYSE or AMEX firms during the period 1979-91, they find a lagged and contemporaneous relation between dividend changes and earnings. Their analysis also shows that in the two years following dividend increases, earnings changes are unrelated to the sign and magnitude of dividend changes. Bernsterin (1998) expresses concern over the decline in payout over a period of time in the US market. He observes that given the ‘concocted’ earnings estimates provided by firms, the low dividend payout induces reinvestment risk and earnings risk for the investors. He asserts that â€Å"†¦ try calculating the historical correlation between payout ratios in year t and earnings growth over t + 5. The correlation coefficient is positive and statistically significant† 7. Fama and French (2001) analyze the issue of lower dividends paid by corporate firms over the period 1973-1999 and the factors responsible for the decline. In particular they analyze whether the lower dividends were the effect of changing firm characteristics or lower propensity to pay on the part of firms. They observe that proportion of companies paying dividend has dropped from a peak of 66. 5 percent in 1978 to 20. 8 percent in 1999. They attribute this decline to the changing characteristics of firms: â€Å"The decline in the incidence of dividend payers is in part due to an increasing tilt of publicly traded firms toward the characteristics – small size, low earnings, and high growth – of firms that typically have never paid dividends†8. Baker, Veit and Powell (2001) study the factors that have a bearing on dividend policy decisions of corporate firms traded on the Nasdaq. The tudy, based on a sample survey (1999) response of 188 firms out of a total of 630 firms that paid dividends in each quarter of calendar years 1996 and 1997, finds that the following four factors have a significant impact on the dividend decision: pattern of past dividends, stability 7 8 Bernstein (1998), pp. 1. Fama and French (2001), p. 79 4 of earnings, and the level of current and fut ure expected earnings. The study also finds statistically significant differences in the importance that managers attach to dividend policy in different industries such as financial versus non-financial firms. Ramacharran (2001) analyzes the variation in dividend yield for 21 emerging markets (including India) for the period 1992-99. His macroeconomic approach using country risk data finds evidence for pecking order hypothesis – lower dividends are paid when higher growth is expected. The study also finds that political risk factors have no significant impact on dividend payments of firms in emerging markets. Lee and Ryan (2002) analyze the dividend signaling-hypothesis and the issue of direction of causality between earnings and dividends – whether earnings cause dividends or vice versa. For a sample of 133 dividend initiations and 165 dividend omissions, they find that dividend payment is influenced by recent performance of earnings, and free cash flows. They also find evidence of positive (negative) earnings growth preceding dividend initiations (omissions). 2. 1 Previous Indian Studies Kevin (1992) analyzes the dividend distribution pattern of 650 non-financial companies which closed their accounts between September 1983 and August 1984 and net sales income of one crore rupees or more. He finds evidence for a sticky dividend policy and concludes that a change in profitability is of minor importance. Mahapatra and Sahu (1993) analyze the determinants of dividend policy using the models developed by Lintner (1956), Darling (1957) and Brittain (1966) for a sample of 90 companies for the period 1977-78 – 1988-89. They find that cash flow is a major determinant of dividend followed by net earnings. Further, their analysis shows that past dividend and not past earnings is a significant factor in influencing the dividend decision of firms. Bhat and Pandey (1994) study the managers’ perceptions of dividend decision for a sample of 425 Indian companies for the period 1986-87 to 1990-91. They find that on an average profit-making Indian companies have distributed about one-third of their net earnings and that the average dividend payout ratio is 43. 6 percent. They also find that the average dividend payout ratio is 54 percent for the sample of both profitmaking and loss-making companies and the average dividend rate is in the range of 14. 3 percent to 19. 2 percent. They also observe variation in dividend policy of different industries. Further, a survey of these 425 companies has been attempted. How ever, only 31 questionnaires have been received and of these they find 28 amenable for further analysis. Their analysis of the respondents shows that managers perceive current earnings as the most significant factor influencing their dividend decision followed by patterns of past dividends. They also find two other variables increasing equity base and expected future earnings to have significant influence. However, they find industry to have the least influence on the dividend, which has been contrary to the expectations. Mishra and Narender (1996) analyze the dividend policies of 39 state-owned enterprises (SoE) in India for the period 1984-85 to 1993-94. The find that earnings per share (EPS) is a major factor in determining the dividend payout of SoEs. Narasimhan and Asha (1997) discuss the impact of dividend tax on dividend policy of firms. They observe that the uniform tax rate of 10 percent on dividend as proposed by the Indian union budget 1997-98, alters the demand of investors in favor of high payouts rather than low payouts as the capital gains are taxed at 20 percent in the said period. Mohanty (1999) analyzes the dividend behavior of more than 200 firms for a period of over 15 years. He finds that in most bonus issue cases firms have either maintained the pre-bonus level or only decreased it marginally there by increasing the payout to shareholders. The study also finds that firms that declared bonus during 1982-1991 showed higher returns to their shareholders compared to firms which did not issue bonus shares but maintained a steady dividend growth. He finds evidence for a reversal of this trend in the 1992- 5 1996 period. He attributes such a reversal in trend to the changed strategy of multi-national corporations (MNCs) and their reluctance to issue bonus shares. Narasimhan and Vijayalakshmi (2002) analyze the influence of ownership structure on dividend payout of 186 manufacturing firms. Regression analysis shows that promoters’ holding as of September 2001 has no influence on average dividend payout for the period 1997-2001. 3. Database and Methodology 3. 1 Database Dividend payment pattern of all companies that are listed for trading on one of the two major exchanges namely National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) during the period 1989-1990 to 2000-2001 (we refer each year henceforth with the end year i. e. for 2000-2001 to 2001) are employed for analysis. The data has been sourced from Prowess database of the Centre for Monitoring Indian Economy (CMIE). For the purpose of this study, only final cash dividends are considered and stock repurchases and stock dividends are not considered. Unlike the firms in developed countries that pay quarterly dividends, Indian companies typically pay only one dividend during a year. A few firms do pay interim dividends, however, data regarding these are not readily accessible and it is extremely difficult to get such data for a reasonable number of years. Further, stock repurchases have been permitted only recently and only about a hundred companies have bought back their stocks so far. Hence, in the present study stock repurchases are not considered for analysis. Stock price data for the prior year of dividend announcement are also taken from the Prowess database. 3. 2 Methodology for Analysis of Trends To analyze the trends in dividend payment pattern, number of companies paying dividend as percentage of total firms, average dividend paid, dividend per share, payout ratio, and dividend yield are computed for the period 1990 to 2001. Dividend per share (DPS) is calculated as DPS j ,t = Dividend j ,t EQCap j ,t Where, DPSj,t refers to dividend per share for company j in year t; Dividend j,t refers to amount of dividend paid by company j in year t; and EQCap j,t refers to paid -up equity capital for firm j in year t. Equity capital is employed instead of the usual number of outstanding shares in the denominator as it facilitates comparison of rupee dividend paid per share by removing the impact of different face or par values. Dividend payout ratio (PR) is computed as PR jt = Dividend j , t PAT j ,t Where, PR j,t is dividend payout ratio, Dividend j,t refers to amount of dividend paid by company j in year t; and PATj,t refers to net profit or profit after tax for firm j in year t. Dividend Yield (DY) is computed as 6 DY jt = DPS j ,t Price j ,t ? 1 t Where, DYjt refers to dividend yield for firm j in year t, DPSjt refers to dividend per share for firm j in year , and Pricej,t-1 is closing price of previous year for firm j. Further, the entire sample is categorized into payers and non-payers to examine the trends in dividends across different subgroups. Payers are those firms that have paid dividend in the current year, where as nonpayers have not paid dividend in the current year. Payers are further classified into regular payers, initiators and current payers. Regular payers are those firms that have paid dividend regularly without ever skipping the payments. Initiators on the other hand refers to those firms with a maiden dividend, where as current payers are those firms who are neither regular payers nor initiators. Non-payers are further categorized into never paid, former payers and current non-payers. Never paid firms are those that have never paid even a single dividend, where as former payers are those firms which at some previous point had paid dividends. Current non-payers are those firms which are recently listed and that they are neither former-payers nor are in the never paid category in any of the previous years. 3. 3 Influence of Tax Regime Change: Test of Trade-off Theory Paired samples t-test has been employed to analyze the influence of changes in dividend tax during 199798 on the dividend propensity of Indian corporate firms. According to the tradeoff theory, corporate firms pay more dividends when the dividend tax is low compared to that of capital gains tax. The tax regime ushered in during 1997-98, whereby dividends are taxed at source at a uniform rate of 10%, has tilted the balance in favor of dividends. Changes in dividends are captured with the help of two measures – dividend per share and dividend payout percentage. For this purpose total dividend per share and average dividend payout percentage during the previous tax regime, i. e. the incidence of dividend tax is on the investors are compared with that of changed tax regime where dividend taxes are payable by corporate firms at a flat rate of 10%. The period 1994-95 to 1996-97 constitutes the first sub-period and the period 1998-99 to 2000-01 constitutes the second period. The following hypotheses are tested using paired samples t-test: (i) Null hypothesis of no differences between the total dividend per share between the two periods; and (ii) Null hypothesis of no difference between the average percentage payout between the two periods. Further, changes in the propensity of regular payers and changes in the payment pattern between 1996-97 and 1998-99 as a result of change in tax regime are also tested. 3. 4 Characteristics of Payers and Non-Payers Consistent with Fama and French, logit regression coefficients are estimated to analyze the influence of firm characteristics on the dividend payment pattern, for each year t during 1990-2001. The dependent variable assumes a value of 0 when the firm pays no dividend and assumes a value of 1 when pays a dividend. The explanatory variables are: Et/At is profitability measured as the ratio of aggregate earnings before interest to aggregate assets; dAt/At, is growth rate of assets; Vt/At is market-to-book ratio i. e. , the ratio of the aggregate market value to the aggregate book value of assets; and the NSEPt is the percent of firms with the same or lower market capitalization. Coefficients are computed for each of the year 7 and the aggregate coefficients and associated t values are analyzed to infer the influence o profitability, f growth and size. 3. Test of Signalling Hypothesis: Case of Dividend Initiations and Omissions For this part of the analysis, a firm is classified as initiator if it has paid dividend in the current year but has not paid dividends for the preceding 3 years. Similarly a firm is categorized as omission firm, if the firm has not currently paid dividend but has paid dividend in the preceding three years. To analyze signaling hypothesis, consistent with Healey and Palepu , earnings patterns of firms initiating and omitting dividend for 3 years before the year of event and 3 years after event are examined. To aggregate results across firms, earnings changes in these years are expressed as a percentage of the previous year’s closing stock price, PJ. The standardized change in earnings for firm j in year t, is defines as ? E j ,t = E j ,t ? E j ,t ? 1 Pj Where Ej,t are earnings per share before extraordinary items and discontinued operations9 for firm j in year t. The null hypotheses of average earnings changes are zero is tested with the help of Dunnett’s C (Post Hoc) test. Analysis pertaining to initiations and omissions only cover a particular sample of extreme events and excludes firms not having a dividend track record of less than 3 years. In order to cover other dividend events like dividend reductions and increases in the following we arrive at yet another sample. 3. 6 Test of Signaling Hypothesis: Case of Dividend Reductions To analyze the relationship between dividends and losses a sample is drawn with firms having consistent profitability and dividend track records during 1990 – 1995 and who have earnings and dividend information for the period 1996 – 2001. The importance of annual losses on dividend reductions and annual dividend omissions has been analyzed with the help of logit analysis. The dependent variable equals zero if a firm has maintained or increased its dividend per share and is equal to one if the firm announced a reduction in dividend per share. The loss dummy assumes a value of one if the firm reports a loss for the year under study and zero otherwise. The level of net income and changes in net income are standardized with the previous year’s net worth for each firm. For firms in loss sample, the initial loss year constitutes the event year where as for non-loss firms, the initial year of earnings decline constitutes the event year. Similarly to examine the influence of past and future levels of earnings logit analysis has been employed on the subset for event years 1997 and 1998. The dependent variable equals zero if a firm has maintained or increased its dividend per share and is equal to one if the firm announced a reduction in dividend per share. The explanatory variables are earnings in 1 year before the event (t-1), 2 years preceding the event (t-2), current earnings (t), earnings in the year following the event year (t+1), earnings in 2 years following the event (t+2). Similarly, mean difference in earnings over t 2 through t+2 years is also examined with the help of Dunnett’s C test. This analysis would be useful in determining whether dividend changes are impacted by contemporaneous or lagged or expected earnings performance. 9 In the Indian context an approximate value for this is derived from ‘other income’. 8 4. Trends in Dividends and Influence of Changes in Tax Regime Average profit after tax (PAT) has increased from Rs. 4. 68 crore in 1990 to Rs. 6. 11 crore in 2000 and Rs. 9. 36 crore in 2001 (Table 4. 1). However, there have been several fluctuations in average PAT reflecting the changes in Indian economy. In the early phases of economic reform, many firms had to restructure as the economy was opened up and structural adjustments were undertaken resulting in a reduction in PAT. The subsequent pick up in the mid -90s has seen an increase in average PAT. The late 1990s, which marked a significant decline in economic activity, have had their impact on PAT of firms. 4. 1 Average Dividend Paid Despite fluctuations in PAT, the average aggregate dividend payments have steadily increased from Rs. . 99 crore in 1990 to Rs. 2. 93 crore in 2000 and Rs. 4. 19 crore in 2001. Further, compared to PAT the dividend payments have exhibited a smooth trend implying that dividend smoothening is occurring in the Indian context (Figure 4. 1). Table 4. 1 Trend in Dividends and PAT During 1990-2001 Year Number of Firms 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Common Firms 1707 2184 2505 30 97 4020 5115 5600 5855 5980 6248 6225 4766 871 Average Dividend Rs. Crore 0. 99 0. 98 1. 11 1. 11 1. 27 1. 56 1. 85 2. 05 2. 26 2. 9 2. 93 4. 19 SD of Average SD of Dividend PAT PAT Rs. Crore Rs. Crore Rs. Crore 3. 92 4. 68 48. 45 3. 79 4. 05 37. 88 4. 54 4. 19 40. 45 4. 85 3. 06 46. 76 6. 19 4. 15 51. 41 8. 42 6. 96 57. 55 10. 80 7. 19 62. 92 13. 91 6. 38 65. 65 17. 18 5. 69 103. 52 22. 14 5. 09 88. 19 26. 46 6. 11 103. 54 44. 71 9. 36 134. 39 Number of firms paid dividend during the study period have shown an up trend till 1995 and have fallen subsequently (Appendix Figure 4. 1), where as the percentage of companies paying dividends has declined from 60. percent in 1990 to 32. 1 percent in 2001 (Table 4. 2 and Figure 4. 2). This is consistent with the trend observed in the US market (Fama and French 2001). The fact that percentage of companies paying dividends have declined whereas the average dividend paid has increased implies tha t companies which have been paying dividend have paid higher amounts in recent years. Total non-payers have steadily increased from 1990 to 2000 before declining slightly in 2001 (Appendix Table A4. 1 and Figures A4. 2 and A4. 3). Firms, which have never paid dividend, constituted a significant proportion through out the sample period – constituting more than 50% from 1991 to 2001 continuously. The number of firms, which at some previous time paid dividend, have increased overtime and reached almost 50% of non-payers in 2001. Figure 4. 1 9 Trend in Average Dividends, and PAT During 1990-2001 Average Dividend Average PAT 10 9 8 7 6 5 4 3 2 1 0 1990 1992 1994 1996 1998 2000 Rs. Crores Year Table 4. 2 Trend in Dividend Payments During 1990-2001 Year Paid Dividend No. 033 1272 1533 1823 2333 2775 2723 2386 2101 2007 1988 1531 % 60. 50 58. 20 61. 20 58. 90 58. 00 54. 30 48. 60 40. 80 35. 10 32. 10 31. 90 32. 10 Not Paid Dividend No. 674 912 972 1274 1687 2340 2877 3469 3879 4241 4237 3235 % 39. 50 41. 80 38. 80 41. 10 42. 00 45. 70 51. 40 59. 20 64. 90 67. 90 68. 10 67. 90 Total Number of Firms 1707 2184 2505 3097 4020 5115 5600 5855 5980 6248 6225 4766 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total number of firms paying dividend has increased up to 1995 and has registered sustained decline there after (Table 4. , Appendix Figures A4. 4 and A4. 5). Mirroring these trends firms, which have paid dividends regularly, peaked in 1995 and recorded declines thereafter. Initiators have shown a steady decline from 1991 and have fallen to 5% in 2001. Average dividend paid by payers has increased steadily from Rs. 1. 69 crore in 1991 to Rs. 9. 16 crore in 2000 and Rs. 13. 05 crore in 2001 (Figure 4. 3, Appendix Table A4. 2). Regular payers are more in number and have paid higher average dividend compared to that of current payers and initiators (Appendix Figures A4. 6 and A4. 7). Current payers have paid higher dividend compared to initiators except in the year 2001. The number of initiators have increased up to the year 1995 and have shown a decline thereafter, where as current payers have steadily increased in number up to 2000. 10 Figure 4. 2 Dividend Behaviour of Indian Corporate Firms During 1990 – 2001 (in %) 80% 70% 60% % Non-Payers % Payers % of Firms 50% 40% 30% 20% 10% 0% 1990 1992 1994 1996 1998 2000 Year Figure 4. 3 Comparision of Average Dividend Paid During 1991 2001 by Payer Group Initiator Current Payers Regular Payers Total Payers 20 15 10 5 0 Rs. Crore 1991 1993 1995 1997 1999 2001 Year A comparison of index and non-index firms shows that the former group of companies on average has paid more dividend than the latter group (Table A4. 3 and A4. 4). Similarly, it is observed that companies, which constitute popular market indices such as Sensex and Nifty paid more dividends compared to companies in the broad market indices such as BSE 100, CNX Mid-Cap, BSE 200, CNX 500, and BSE 500. These observations are on the expected lines as higher dividend payment is one of the important criteria for inclusion of stocks into indices. A study of number of companies paying dividend also reveals that a significantly larger proportion of index firms have paid dividend compared to non-index firms. 29 out of 30 Sensex firms and 49 out of 50 Nifty firms have paid dividend in 2001, the exception being Tata Engineering and Locomotive Company Ltd. (TELCO). Analysis of industry-wise average dividend paid shows that in the early 1990s, firms in the diversified industry have paid more dividends followed by mining firms and electricity firms (Table 4. 3). However, by the end of 2000 and 2001 firms in the electricity industry have paid more dividend followed by mining and diversified companies. It has also been observed that textile companies have continued to pay low amounts on an average throughout the sample period where as firms in the financial services industry have improved their average dividend payments over the sample period. The recent h growth firms in the computer igh 11 hardware and software segments, which are part of the machinery industry, have generally shown lower dividend payments. In sum, the number of firms paying dividend during the study period have shown an up trend till 1995 and have fallen subsequently. Further, compared to PAT the dividend payments have exhibited a smooth trend implying that dividend smoothening is occurring in the Indian context. Regular payers are more in number and have paid higher average dividend compared to that of current payers and initiators. Of the nonpayers, former payers are growing in numbers. Index firms appear to pay higher dividends compared to that of non-index firms. Further, smaller indices appear to have higher average dividend compared t that of o larger indices. Industry trends indicate that firms in the electricity, mining and diversified industries have paid more dividend where as textile companies have paid less dividends. Firms in the machinery industry which includes computer hardware and software segments have shown lower dividends. Table 4. 3 INDUSTRY Average Dividend Paid During 1990-2001 – Industry-wise (in Rs. Crore) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1. 09 3. 56 1. 28 . 67 . 88 . 70 . 80 2. 57 . 39 . 50 1. 02 . 48 1. 25 . 96 3. 88 1. 14 1. 39 . 97 . 65 . 90 2. 79 . 51 . 62 . 76 . 47 1. 17 1. 05 4. 24 1. 19 1. 47 . 98 . 72 1. 37 2. 97 . 72 . 70 . 86 . 47 1. 0 . 97 5. 11 2. 26 1. 38 . 89 . 73 1. 36 3. 57 . 62 . 64 . 92 . 53 1. 06 1. 08 6. 14 5. 85 1. 49 . 94 . 83 1. 72 2. 87 . 73 . 63 1. 01 . 72 1. 39 1. 38 1. 57 1. 69 1. 92 7. 72 10. 13 10. 99 12. 86 9. 54 13. 08 18. 31 17. 37 2. 10 2. 46 2. 72 3. 16 1. 02 . 80 . 90 1. 12 . 99 1. 11 1. 13 1. 20 2. 20 2. 39 2. 14 1. 80 2. 94 8. 87 17. 44 22. 23 . 70 . 75 . 57 . 35 . 85 1. 18 1. 00 . 86 1. 07 1. 18 1. 23 1. 34 . 86 . 82 . 58 . 51 2. 02 2. 83 3. 58 3. 18 1. 68 17. 17 26. 33 3. 20 1. 13 1. 34 1. 40 21. 99 . 56 . 90 1. 34 . 48 2. 95 2. 41 22. 76 27. 24 4. 25 1. 34 1. 58 1. 72 26. 31 . 58 1. 12 1. 42 . 56 3. 44 2001 Firms 2. 46 29. 55 48. 7 5. 29 1. 89 2. 11 3. 08 35. 36 1. 05 1. 51 4. 07 . 56 3. 03 1138 184 58 1097 745 1065 555 81 324 296 1264 750 225 Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machinery Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 4. 2 Dividend Per Share Average dividend per share (DPS) has increased from 14 paisa in 1990 to 26 paisa in 2000 and 15 paisa in 2001 (Table 4. 4, Figure 4. 4). An analysis of distribution of firms shows that 39 percent have paid nil DPS in 1990 and the percentage has increased to 67. 7 in 2001 (Table 4. ). Percentage of firms in the average class i. e. , DPS in the range of Rs. 0 to Rs. 0. 25 have declined from a high of 45. 9 in 1990 to 18. 5 in 2001. This implies that the increased average DPS over the latter period has mainly been due to a few firms paying larger DPS. Firms in chemicals and plastics industry have steadily improved their DPS from 14 paisa in 1990 to 27 paisa in 2000 and 25 paisa in 2001 (Table 4. 6). Where as textiles firms have shown a decline in DPS from 13 paisa in 1990 to 6 paisa in 2001. Machinery firms have paid a steady 12 to 14 paisa except for the years 1996 and 1997 when they paid marginally more. An analysis of index and non-index firms DPS shows that index firms on an average paid more DPS than non-index firms (Table A4. 14). Similarly, narrow indices have high average DPS than broad indices. 12 Table 4. 4 Average Dividend Per Share (DPS) During 1990-2001 (in Rs. ) Year Number Minimum Maximum of Firms DPS DPS 1990 1694 0 12. 71 1991 2153 0 10. 58 1992 2468 0 15. 58 1993 3028 0 51. 2 1994 3953 0 57. 5 1995 5032 0 135. 33 1996 5536 0 174. 67 1997 5801 0 222 1998 5911 0 350. 33 1999 6176 0 249. 75 2000 6167 0 266. 38 2001 4734 0 61. 5 Common 866 Firms10 Average DPS 0. 1406 0. 1385 0. 1427 0. 1514 0. 1582 0. 803 0. 2158 0. 198 0. 2337 0. 2544 0. 2571 0. 1538 Std. Deviation 0. 3455 0. 3009 0. 3568 1. 0025 1. 2983 2. 3543 3. 3243 3. 4834 5. 8833 4. 8938 4. 4156 1. 2899 Average DPS (1% trimmed) by all payers have increased from 21 paisa in 1991 to 31 paisa in 2000 and 29 paisa in 2001 (Figure 4. 5). Of the payers, regular payers have consistently paid more dividend per share compar ed to other payers. Similarly initiators have always paid lower dividend per share compared to current payers. Figure 4. 4 Average Dividend Per Share (DPS) During 1990-2001 Average DPS (in Rs. ) Average DPS 0. 30 0. 25 0. 20 0. 15 0. 10 0. 05 0. 0 1990 1992 1994 1996 1998 2000 Year An analysis of recurrence of dividend per share group shows that two firms have consistently paid dividend in the range of 25 to 50 paisa per share for all the 12 years, where as 18 firms have paid up to 25 paisa (Appendix Table A4. 6 and A4. 7). An analysis of dividend reductions by firms shows that only five companies namely Mahindra Sintered Products Ltd, Otis Elevator Co. (India), Bharat Electronics, Amritlal Chemaux, and Carborundum Universal have consistently paid higher dividend per share out of a 330 firms that paid dividends in all years of the sample period (Appendix Table A4. ). 43 firms registered a single instance of dividend per share reduction, where as 68 firms lowered twice, 82 firms lowe red thrice etc. On the whole average DPS has shown a steady growth except in the year 2001. Regular payers have consistently paid more dividend per share compared to other payers, where as initiators have always paid 5 common firms are lost on account of missing information on number of outstanding stocks and hence there is difference in the number of common firms from that of Table 4. 1. 10 13 lower dividend per share. Analysis also shows that only a few firms have consistently paid same levels of dividend. Index firms on an average paid more DPS than non-index firms. Similarly, narrow indices have high average DPS than broad indices (Appendix table A4. 8). Firms in chemicals and plastics industry have steadily improved their DPS, where as textiles firms have shown a decline in the study period. Machinery firms have paid a steady DPS. Figure 4. 5 1% Trimmed Dividend Per Share by Payer Type Current Payers Initiators Regular Payers Total 0. 35 0. 3 DPS (in Rs. ) 0. 25 0. 2 0. 15 0. 1 0. 05 1991 1993 1995 1997 1999 2001 Year Table 4. 5 Distribution of Firms in terms of Dividend Per Share During 1990 – 2001 DPS Rs. Rs. 0 – 0. 25 Rs. 0. 25 – 0. 50 Rs. 0. 50 – 0. 75 Rs. 0. 75 – 1 Rs. 1 – 2 Rs. 2 – 5 > Rs. 5 Percentage of Companies in Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 39 41 37. 9 39. 9 41. 1 44. 9 50. 8 58. 9 64. 5 67. 5 67. 8 67. 7 45. 9 43. 1 46. 2 46. 9 45 42. 3 35. 8 27. 5 22. 2 19. 5 18. 6 18. 5 13. 5 13. 7 13 . 7 11. 2 12. 1 10. 6 10. 4 9. 8 8. 7 7. 6 7. 4 7. 8 0. 9 1. 3 1. 4 0. 9 0. 7 1. 1 1. 5 2. 3 2. 8 2. 5 2. 6 2. 7 0. 4 0. 5 0. 4 0. 7 0. 8 0. 4 0. 6 0. 6 0. 6 1. 1 1. 2 1. 3 0. 2 0. 3 0. 3 0. 2 0. 2 0. 3 0. 4 0. 6 1 1. 1 1. 4 1. 4 0. 1 0. 1 0 0. 1 0. 1 0. 2 0. 2 0. 1 0. 0. 3 0. 6 0. 4 0. 1 0 0 0. 2 0. 1 0. 1 0. 2 0. 2 0. 2 0. 3 0. 4 0. 3 Table 4. 6 Industry-wise Dividend Per Share (DPS) During 1990-2001 (in Rs. ) INDUSTRY Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machineray Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 FIRMS . 14 . 15 . 14 . 12 . 17 . 15 . 12 . 17 . 17 . 18 . 27 . 25 1138 . 19 . 21 . 26 . 20 . 20 . 19 . 21 . 22 . 21 . 22 . 27 . 21 184 . 13 . 10 . 11 . 11 . 11 . 10 . 12 . 9 . 10 . 10 . 13 . 10 58 . 08 . 11 . 13 . 34 . 24 . 21 . 28 . 12 . 15 . 14 . 19 . 18 1097 . 20 . 20 . 18 . 23 . 31 . 47 . 4 9 . 58 . 85 . 21 . 16 . 13 745 . 12 . 13 . 14 . 14 . 13 . 13 . 17 . 19 . 12 . 14 . 14 . 14 1065 . 13 . 11 . 11 . 09 . 10 . 10 . 12 . 09 . 07 . 06 . 07 . 07 555 . 05 . 07 . 06 . 07 . 09 . 06 . 07 . 08 . 13 . 10 . 11 . 09 81 . 12 . 12 . 14 . 10 . 11 . 10 . 10 . 15 . 06 . 16 . 21 . 30 324 . 10 . 11 . 11 . 09 . 09 . 09 . 10 . 08 . 08 . 07 . 09 . 09 296 . 17 . 15 . 17 . 15 . 13 . 24 . 38 . 28 . 42 . 88 . 73 . 12 1264 . 13 . 14 . 13 . 11 . 12 . 09 . 08 . 06 . 06 . 05 . 07 . 06 750 . 2 . 12 . 12 . 12 . 13 . 13 . 15 . 18 . 16 . 15 . 21 . 17 225 14 4. 3 Dividend Payout Ratio An analysis of average percentage dividend payout (PR) during 1990 – 2001 shows a volatile trend (Table 4. 7 and Figure 4. 6). Percentage PR increased from 27. 39 in 1990 to 32. 95 in 1997 and then showed a declining trend till 2000 before reaching the peak average percentage PR of 40. 53 in 2001. However, 1% trimmed average percentage PR showed a more stable pattern of around 24 percent PR up to 1997 and then has shown a declining trend before finally reaching 16. 81 percent in 2001 (Appendix Table A4. ). Table 4. 7 Average Percentage Payout During 1990 – 2001 Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 No. of Average Std. Firms % Payout Deviation 1382 1714 2022 2533 3156 3770 4042 4258 4335 4503 4383 3387 27. 39 25. 19 27. 54 27. 98 28. 19 25. 88 27. 44 32. 95 31. 39 22. 82 21. 6 40. 53 37. 77 41. 04 48. 31 37. 83 61. 96 38. 06 88. 12 139. 85 453. 37 120. 19 67. 49 1196. 96 1% Trimmed Average % Payout 24. 98 23. 11 24. 25 25. 72 24. 92 23. 84 23. 99 23. 91 18. 64 16. 98 17. 47 16. 81 1% Trimmed No. of Firms 1369 1697 2002 2508 3125 3733 4002 4216 4292 4458 4340 3354 An analysis of distribution of firms by dividend payout percentage shows that as high as 26 percent of firms in 1990 and 56. 6 percent in 2001 have paid out nothing (Table 4. 8 and Appendix, Figure A4. 6). However, more than 10 percent firms have paid dividend in excess of 75 percent of their net profits. An analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time (Appendix Table A4. 10 and A4. 11). For instance, only one firm – Hindustan Lever Limited – has paid out a dividend in the range of 50 to 75% of its net profit for entire sample period. Similarly another firm – Maharashtra Scooters Limited – maintained a dividend payout in the range of 10 to 20% for 11 of the 12-year sample period. Similarly, Kinetic Engineering Ltd. , Lakshmi Machine Works Ltd. , and Dalmia Cement (Bharat) Ltd. have paid out in the range of 10 – 20% for 10 of the 12-year sample period. Figure 4. 6 Average % Payout During 1990-2001 Average % Payout 50 40 30 20 10 0 1990 1992 1994 1996 1998 2000 1% Trimmed Average % Payout Average Payout % Year 15 An analysis of industry-wise DPO shows a declining trend across all industries during the sample period (Table 4. ). Diversified firms, which have a DPO in excess of 25 percent in 1990, have less than 14 percent in 2001. Firms in metals and metal products industry have registered a high degree fall in DPO from 22. 84 percent in 1990 to 8. 74 percent in 2001. Table 4. 8 Distribution of Firms’ Payout Percentage During 1990 – 2001 Dividend Payout % 0 0 – 10 10 – 20 20 – 30 30 – 40 40 – 50 50 – 75 75 – 100 100 – 200 > 200 Firms % of Firms 1990 1991 26 6. 9 14. 5 16. 5 12. 6 8. 2 10. 1 3. 5 1. 2 0. 4 1382 1992 1993 28. 9 7. 2 11. 9 13. 5 12. 3 9. 5 10. 5 4. 6 1. 3 0. 4 2533 1994 26. 6 8 14. 3 15 12. 7. 7 10. 2 4. 5 0. 9 0. 3 3156 1995 26. 7 6. 6 15. 6 16. 7 12. 5 8. 7 8. 6 3. 4 0. 9 0. 3 3770 1996 33. 3 5. 5 13. 6 13. 7 10. 8 7. 3 8. 6 5. 4 1. 4 0. 4 4042 1997 1998 1999 2000 2001 45. 4 52. 8 57 55. 8 56. 6 3. 1 3. 4 3. 4 3. 8 3. 8 7. 9 7. 6 6. 7 6. 6 7. 6 10. 9 9. 8 8. 2 8. 9 7. 9 8. 5 7. 5 6. 9 6. 7 6. 9 6. 4 5. 4 5. 2 5. 4 4. 8 9. 1 7. 8 6. 7 6. 5 7. 1 5. 2 3. 2 3. 9 4. 2 3. 2 2. 1 1. 6 1. 3 1. 5 1. 5 1. 3 1 0. 7 0. 7 0. 7 4258 4335 4503 4383 3387 26. 5 25. 3 9. 3 9. 2 14. 1 13. 9 17. 2 16. 1 12. 6 13. 3 7. 1 8. 8 9 8. 9 2. 9 2. 7 0. 9 1. 4 0. 2 0. 4 1714 2022 Table 4. 9 Industry-wise Dividend Payout During 1990 – 2001 (in %) INDUSTRY Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machineray Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 1990 23. 92 25. 28 17. 98 23. 28 24. 47 23. 93 22. 84 10. 28 18. 10 19. 71 20. 01 16. 83 19. 31 1991 20. 38 20. 95 16. 21 27. 01 23. 15 20. 36 21. 47 7. 29 18. 08 17. 75 21. 15 15. 98 19. 96 1992 21. 51 22. 78 14. 15 28. 50 24. 19 22. 87 19. 86 12. 28 15. 69 16. 95 19. 25 17. 26 21. 61 1993 23. 38 25. 48 13. 37 32. 11 22. 4 23. 42 20. 65 9. 56 17. 18 16. 27 19. 84 20. 98 21. 29 1994 20. 14 22. 74 12. 48 29. 87 20. 40 23. 67 20. 92 14. 04 17. 87 14. 78 21. 15 20. 54 23. 26 1995 21. 88 23. 23 16. 98 27. 25 17. 01 22. 07 19. 76 12. 10 18. 91 14. 92 19. 60 19. 20 20. 99 1996 20. 53 21. 61 12. 70 31. 74 17. 23 20. 83 18. 82 16. 58 17. 81 13. 87 19. 34 17. 30 19. 69 1997 18. 37 23. 27 16. 32 29. 19 16. 14 19. 45 16. 78 14. 65 15. 55 13. 62 17. 43 13. 84 22. 46 1998 14. 76 19. 34 10. 42 16. 12 12. 73 16. 28 12. 56 11. 50 9. 84 10. 78 14. 00 11. 29 20. 96 1999 13. 84 17. 41 9. 35 14. 82 12. 67 15. 36 9. 37 9. 87 12. 8 9. 66 12. 27 7. 99 18. 74 2000 14. 18 17. 52 12. 68 16. 21 12. 80 15. 24 9. 16 11. 98 12. 59 8. 93 12. 85 9. 04 20. 18 2001 13. 71 13. 59 13. 08 14. 30 10. 22 15. 15 8. 74 11. 76 15. 09 11. 29 12. 54 8. 02 17. 29 Total payers have registered an increase in payout from 31. 25% in 1991 to a peak of 43. 02% in 1997 and finally paid out 37. 64% in 2001 (Figure 4. 7 and Appendix Table 4. 12). Of the payers, regular payers have consistently paid higher payout compared to that of current payers. Further, initiators have shown higher fluctuations in their payout compared to that of regular payers. In sum, average percentage PR showed a more stable pattern up to 1997 and then has shown a declining trend. Analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time. Industry-wise DPO shows a declining trend across all industries during the sample period. Of the payers, regular payers have consistently paid higher payout compared to that of current payers. Further, initiators have shown higher fluctuations in their payout compared to that of regular payers. 16 Figure 4. 7 1% Trimmed Dividend Payout % by Payer Type Current Payers Regular Payers 50 Initiators Total Payers % Payout 45 40 35 30 25 20 1991 1993 1995 1997 1999 2001 Year 4. 4 Dividend Yield Average dividend yield for all companies during the period 1991 to 2001 has declined from 1. 73% in 1991 to . 55 in 1993 before finally recovering to 1. 61 in 1998 and again falling marginally to 1. 24% in 2001 (Table 4. 10 and Figure 4. 8). On the whole the dividend yield is range bound in the region of 0. 5% to 1. 73%. The reason for the fall in 1993 could be due to high increases in market capitalizations of a number of stocks in the face or irregularities in the stock market in 1992. Analysis of dividend yield by type of payer shows that initiators have always paid higher levels of dividend yield compared to that of current payers and regular payers (Figure 4. 9, and Appendix Table A4. 23). Similarly current payers have paid higher dividend yield compared to that of regular payers. Dividend yields of initiators have declined from 6% in 1991 to 1. 51% in 1993 before recovering and reaching an all time high of 10% in 1998. Compared to this current payers yielded about 5% in 1992 before falling to 1. 81 in 1993 and have subsequently recovered and reached all time high of 8. 2% in 2000. On the other hand regular payers started with a yield of close to 5% but have fallen to a low of 1. 5 in 1993 before reaching an all time high of 7. 76% in 2000. Table 4. 10 1% Upper Trimmed Dividend Yield (%)During 1991 – 2001 Year Mean Median SD Firms 1991 1. 73 . 0 2. 74 1452 1992 1. 66 . 0 2. 57 1603 1993 0. 55 . 0 0. 94 1989 1994 1. 68 . 0 3. 02 2559 1995 1. 44 . 0 2. 85 3 481 1996 1. 01 . 0 1. 88 4214 1997 1. 46 . 0 2. 99 4864 1998 1. 61 . 0 3. 80 5049 1999 1. 44 . 0 3. 86 5235 2000 1. 43 . 0 3. 96 5182 2001 1. 24 . 0 3. 15 4097 Note: Median values are considered only up to 1 decimal. However, there are non-zero values. On the whole dividend yield of aggregate payers shows a significant increase from 1991 to 2001. 17 Average dividend yield has differed from industry to industry (Table 4. 11). Diversified firms, followed by firms in electricity, food and beverages and textiles industries paid higher dividend yields in 1991 while financial services and mining firms paid the lowest. By 2001 diversified firms and electricity continue to pay higher dividend yields where firms in transport industry have improved their dividend yields by 2001. However, food and beverages and textile firms recorded lowered their dividend yield by 2001, where as firms in financial services, and mining have improved their dividend yields. Figure 4. 8 1% Upper Trimmed Dividend Yield During 1991 2001 2. 0 1. 8 1. 6 1. 4 1. 2 1. 0 0. 8 0. 6 0. 4 0. 2 0. 0 1991 1993 1995 1997 1999 2001 Average (%) Year Figure 4. 9 1% Upper Trimmed Dividend Yield by Payer Type Current Payer 12 Initiator Regular Payer Total Average (%) 10 8 6 4 2 0 1991 1993 1995 1997 1999 2001 Year On the whole the dividend yield is range bound during the study period. Analysis of dividend yield by type of payer shows that initiators have always paid higher levels of dividend yield compared to that of current payers and regular payers. Diversified firms and firms in the electricity industry have paid higher dividend yields during the study period. 4. 5 Summary of Analysis of Dividend Trends The number of firms paying dividend during the study period has shown an up trend till 1995 and has fallen subsequently. Average DPS on the other hand has shown a steady growth e xcept for year 2001. Average percentage PR showed a more stable pattern up to 1997 and then has shown a declining trend. Dividend yield measure is range bound. 18 Analysis also shows that only a few firms have consistently paid same levels of dividend. Analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time. Of the payers, regular payers have consistently paid higher payout as well as higher average dividend compared to that of current payers. Iinitiators have always paid higher levels of dividend yield compared to that of current payers and regular payers. Further, narrower indices appear to have higher dividends compared to that of broader indices. Industry trends indicate that firms in the electricity, mining and diversified industries have paid higher dividends where as textile companies have paid less dividends. Firms in the machinery industry which includes computer hardware and software segments have shown lower dividends. Table 4. 11 Average Dividend Yield (%) Industry-Wise During 1991 – 2001 Industry Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machinery Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Products Other Services Textiles Transport Equipment 1991 1. 79 2. 97 2. 27 0. 2 2. 18 1. 66 1. 76 0. 11 1. 41 1. 4 1. 18 2. 06 1. 53 Average 1% Upper Trimmed Dividend Yield in Year 1992 1993 1994 1995 1996 1997 1998 1999 1. 92 0. 55 1. 68 1. 39 0. 99 1. 55 1. 91 1. 82 2. 49 0. 8 2. 64 1. 56 1. 3 2. 16 2. 44 2. 12 1. 31 0. 69 1. 49 1. 04 1. 14 1. 07 0. 93 0. 85 0. 9 0. 41 2. 28 1. 98 1. 45 1. 87 1. 29 1. 05 2. 06 0. 58 1. 4 0. 92 0. 7 1. 21 1. 63 1. 38 1. 55 0. 61 1. 8 1. 57 1. 07 1. 54 1. 87 1. 7 1. 81 0. 53 1. 62 1. 71 1. 15 1. 43 1. 33 1. 22 0. 05 0. 01 0. 02 0. 21 0. 52 0. 45 0. 56 1. 12 0. 98 0. 33 1. 51 1. 32 0. 89 1. 18 1. 35 1. 74 1. 55 0. 49 1. 15 1. 02 0. 86 1. 08 1. 36 1. 46 1. 37 0. 5 1. 33 1. 3 0. 81 1. 23 1. 33 0. 97 1. 8 0. 62 2. 08 1. 2 1 1. 41 1. 74 1. 48 1. 48 0. 55 1. 61 1. 36 1. 22 1. 97 2. 42 2. 24 2000 1. 66 2. 99 1. 47 1. 33 1. 12 1. 32 1. 29 0. 58 1. 34 1. 66 1. 05 1. 65 2. 76 2001 1. 35 2. 11 1. 99 1. 03 1. 06 1. 01 1. 2 0. 81 1. 29 1. 43 0. 98 1. 6 2. 04 4. 6 Changes in Tax Regime and Dividend Propensity Analysis of influence of change in tax regime on dividend propensity shows that total dividend per share has come down from an average of Rs. 0. 84 to Rs. 0. 71, where as average payout percentage has increased from 33. 33% to 51. 05% (Table 4. 12). Mimicking the trends for total firms, regular payers have registered lower DPS and higher payout percentage. As opposed to these changes over sub-periods of 3 years before and after the change in tax regime, one year changes show that DPS has more or less remained at the same level, where as payout percentage has come down from 1997 to 1999. However, paired samples t-test shows that these differences are not statistically significant, except in the case of payout percentage from 1997 to 1999 (Table 4. 13). In sum, it can be inferred from the present study that tax regime changes have not really influenced the dividend behavior of Indian corporate firms and that the tradeoff theory does not hold true in the Indian context. 9 Average Dividends Before and After the Tax Regime Change Variable Total DPS (in Total Firms Rs) Regular Payers Total DPS (in Rs. ) Immediate DPS (in Rs. ) Years Average Total Firms Payout % Average Regular Payers Payout % Immediate Payout % Years Sample After Before After Before 1999 1997 After Before After Before 1999 1997 Mean . 71 . 84 1. 55 1. 72 . 22 . 22 51. 05 33. 33 60. 53 38. 07 27. 78 35. 87 N 2597 2597 765 765 4848 4848 1217 1217 1000 1000 2987 2987 SE Correlation . 17 . 519 . 24 . 27 . 241 . 71 . 06 . 426 . 05 19. 19 . 015 1. 43 23. 35 . 008 1. 68 2. 65 . 072 2. 87 Sig. .000 . 000 . 000 . 610 . 795 . 00 Table 4. 12 Influence of Change in Tax Regime on Dividend Propensity: Paired Samples T-test Difference SE After – Before Total Firms -. 13 . 21 Total DPS Regular Payers -. 17 . 70 (in Rs. ) Immediate Years . 01 . 06 Total Firms 17. 72 19. 23 Average 22. 46 23. 39 Payout % Regular Payers Immediate Years -8. 09 3. 76 t -. 62 -. 24 . 11 . 92 . 96 -2. 15 df 2596 764 4847 1216 999 2986 Sig. .536 . 810 . 909 . 357 . 337 . 032 Table 4. 13 5. Characteristics of Dividend Payers and Non-Payers 5. 1 Profitability Payers on an average have more than twice the payoff on assets compared to that of non-payers (Table 5. 1). This finding is consistent with Fama and French (2001). Of the payers Initiators appear to have on an average higher payoff on assets compared to current payers and regular payers, though their payoffs on assets have shown considerable fluctuations. Current payers and regular payers have similar levels of payoff on assets. Of the non-payers, former payers appear to have higher payoff on assets compared to firms, which never paid dividends. Never paid in turn appears to higher payoff on assets compared to current non-payers. An analysis of EPS of payers and non-payers shows that the former have on an average higher EPS compared to the latter. The difference in magnitude is also quite substantial compared to that of payoff on assets. Of the payers, regular payers have consistently higher EPS compared to that of the other two groups of payers. EPS of current payers and initiators has shown considerable fluctuations over the sample period. Initiators have higher average EPS in the early part of 1990s and last few years of 1990s, where as in the intervening years their EPS has shown a decline. Current payers on the other hand shown an opposite trend compared to that of initiators. All the non-payer groups have shown considerable fluctuations in EPS during the sample period and on average registered a decline in EPS from 1990 to 2001. An analysis of common stock earnings to book equity 20 shows that on an average payers have dominated non-payers as the former firms registered 24% in 1991 and 15% in 2001 to 4% and –6% by the latter in the corresponding years. Of the payers, initiators have higher common stock earnings to book equity compared to that of regular payers and current payers. Regular payers and current payers have similar equity earnings to book equity. However there is a gradual decline in earnings to book equity from 1991 to 2001. Of the non-payer firms, never paid firms appear to have higher equity earnings to book equity compared to current non-payers and former payers. The difference between payers and non-payers is larger in terms of stock earnings to book equity compared to payoff on firm’s assets. These findings are consistent with Fama and French. To sum up it can be concluded that profitability has positive influence on the dividend payment of a corporate firm. Dividend payers are more profitable compared to non-payers. Further, corporate firms in general and non-dividend payers in particular have become less profitable. 5. 2 Growth or Investment Opportunities An analysis of growth of assets shows that payers on an average have higher growth compared to that of non-payers. Payers have grown at percentages of 29. 03 in 1991, 23. 69 in 2000 and 10. 82 in 2001 compared to 18. 65, 4. 12 and 1. 86 in the corresponding years for non-payers. Of the payers initiators appear to have higher growth percentage compared to that of regular payers. Initiators have grown at percentages of 29. 87 in 1991, 49. 13 in 2000 and 57. 54 in 2001 compared to 28. 2, 23. 59 and 6. 78 in the corresponding years for regular payers. Regular payers in turn appear to have higher growth compared to that of current payers. Of the non-payers, never paid have on an average lower growth in assets compared to former payers and current payers. These findings are not consistent with Fama and French where they find never paid firms to have higher growth in assets compared to that of other non-payer and payer groups. Similar trends are observed with regard to growth opportunities as measured by R&D investment to total assets. Payers appear to have higher growth opportunities compared to non-payers. Of the payers, regular payers have higher growth opportunities compared to initiators and current payers. Of the non-payers, never paid appears to have lower growth opportunities compared to current non-payers. However the percentage growth opportunities for payers as well as for non-payers are considerably low as the payers on an average have 0. 02% in 1991 and 0. 27% in 2001 compared to 0. 003% and 0. 0447% in the corresponding years for non-payers. An analysis of aggregate market value to book value of assets shows that payers and non-payers do not differ significantly. However, there are differences with in the payer and non-payer groups. For instance, initiators appear to have higher market value to book value compared to regular and current payers, where as in non-payer group, former payers appear to be dominated by both never paid and current non-payers. On the whole in the Indian context higher growth and growth opportunities have not resulted in lower dividend payments by corporate firms. This finding contradicts the findings of Fama and French, whereby they contend that growth opportunities are an important reason for reduced dividend payments by firms. . 3 Size Dividend payers appear to be much larger in size compared to that of non-payers. This observation is consistent with Fama and French (2001). Average size as measured by assets of payers averaged Rs. 104. 4 crore in 1991 and Rs. 1413. 43 in 2001 compared to that of Rs. 56. 92 and Rs. 181. 20 in the corresponding years for non-payers. 21 Of the payers, regular payers have higher assets compared to that of current payers. Current payers in turn have higher assets compared to initiators. Similarly, regular payers have grown an average asset base of Rs. 112 crore in 1991 to Rs. 711 crore in 2001 compared to Rs. 54. 71 crore and Rs. 581. 48 core for initiators and Rs. 47. 11 crore in 1992 and Rs. 654. 9 crore for current payers. Of the non-payers, former payers appear to have higher assets compared to current never paid who in turn have higher asset base compared to current non-payers. Asset base of former payers has grown from Rs. 90. 14 crore in 1991 to Rs. 239. 2 crore in 2001 while in the corresponding period never paid have grown from Rs. 51. 69 crore to Rs. 80. 57 crore. However, current non-payers have registered a decline in their asset base from Rs. 3. 5 crore to Rs. 18. 73 crore during the same period. An analysis of indebtedness of firms s hows that non-payers appear to have higher levels of long-term borrowings to assets compared to that of payers. Of the non-payers, never paid appears to have higher longterm borrowings to assets compared to former payers, who in turn appear to have higher levels compared to current non-payers. Of the payers, regular payers appear to have higher long-term borrowings to assets compared to current payers. Current payers in turn have higher levels compared to initiators. On the whole, the size of assets of firms have gone up during the period 1990 – 2001 and that increased assets seems to have been financed through long-term borrowing implying pecking order of preference for funds. Table 5. 1 Characteristics of Dividend Payers and Non-Payers Year 1991 1992 1993 Average % Payoff on Assets Current Payers 11. 20 12. 23 Initiators 9. 79 15. 15 12. 57 Regular Payers 11. 69 12. 03 12. 00 Total Payers 11. 44 12. 32 12. 07 Current Non-Payers 6. 58 5. 16 3. 69 Former Payers 10. 24 7. 41 6. 23 Never Paid 4. 44 6. 71 5. 29 Total Non-Payers 5. 49 6. 68 5. 29 Average 1% Trimmed EPS Current Payers 3. 0 4. 83 Initiators 7. 05 7. 47 5. 49 Regular Payers 14. 11 12. 79 9. 07 Total Payers 13. 20 11. 97 8. 46 Current Non-Payers -1. 61 -1. 18 -0. 49 Former Payers 0. 71 -2. 72 -3. 45 Never Paid 0. 07 1. 41 -0. 88 Total Non-Payers 0. 04 0. 49 -1. 41 Average Common Stock Earnings to Book Equity % Current Payers 21 18 Initiators 29 39 27 Regular Payers 22 20 19 Total Payers 24 24 21 Current Non-Payers -15 -7 -41 Former Payers 8 -27 58 Never Paid 14 23 47 Total Non-Payers 4 13 23 Average % Growth (Assets) Current Payers 46. 25 27. 29 Initiators 29. 87 92. 24 66. 77 Regular Payers 28. 92 62. 44 32. 20 Total Payers 29. 03 63. 66 33. 0 Current Non-Payers 16. 13 2. 34 26. 55 1994 12. 67 15. 19 12. 24 12. 58 3. 16 5. 37 4. 91 4. 79 7. 30 4. 53 9. 37 8. 67 -0. 35 -1. 64 -0. 62 -0. 81 23 32 21 24 13 72 14 21 27. 95 50. 41 36. 31 36. 17 46. 48 1995 13. 99 13. 66 12. 21 12. 56 1. 99 5. 94 5. 73 5. 41 6. 95 3. 98 8. 90 8. 15 0. 28 0. 51 0. 59 0. 54 20 26 22 23 4 -65 10 -3 1996 12. 27 11. 25 12. 02 11. 99 3. 67 9. 06 3. 89 5. 61