– Dividend policies are approved at the board of directors level. Thus another contributory factor could be personal liability concerns with the board, as they are increasing being held more responsible over the last 20 + years. A more conservative approach to pay outs (i.e. paying less) increases the chance of being able to pay it out in the future, decreasing the risk of lawsuit in the event of a reduction in the dividend payout (and subsequent devaluation of the stock).

– The introduction of high-tech stocks, which generally have little to no payout (take Nortel, etc) due to the risk associated with them, could help explain further the fact there are less dividend payers;

– As you mention, service-type companies pay less dividends. The North American economy has been switching to a service-oriented economy since the 80s (and prior)

– As companies become more diversified (globally, industries, etc), there is less of a perceived need for the investor to take the dividend and invest in another stock to diversify, thus decreasing the need for a dividend. Take GE, for instance – how many industries has it invested in?

– Historically low interest rates could also be reducing the investor demand for higher dividends.

– Merger & acquisition activity requires a significant level of capital. I would guess that over the last 20+ years M&A strategies have been higher than previously, increasing the need for capital to be held within companies rather than paid out.

Cheers,

John