Determinants of Dividend Payout of Russian Nonfinancial Public Companies: an Empirical Study and International Comparison

Abstract

Goal of the research: To determine the factors which influence the payout of dividends of non-financial public companies in Russia, to explain why these factors influence the payout of dividends and to compare our findings with those of previous research on other countries. Tasks of the research:  Determine and systematize the main theories related to dividend policy;  Summarize and discuss results of existing empirical research on factors determining the payout of dividends for foreign and Russian companies;  Develop quantitative models that will allow us to find out the determinants of payout of dividends in Russia and understand the limitations of these models;  Collect the necessary empirical data for the models that were developed;  Provide a description of the collected data sample (descriptive statistics);  Apply the models using the data collected, determine the relationship between factors in the models and provide an interpretation of the results;  Contrast the dividend determinants in Russia to those in developed and developing countries  Discuss the findings by stating their managerial and research implications, comparing and relating them to results of previous research , defining things that could have been done better in this research and providing recommendations for further research. Main results:  The main theories related to dividend policy were determined and systematized into four groups: effects of dividend payments on stock prices, asymmetric information and signaling, agency problem and dividend policy, clientele effects of dividends;  Results of existing empirical research on factors determining the payout of dividends were summarized and discussed. The following factors were detected worldwide: earnings, financial leverage, growth, ownership, firm size, previous dividend payouts, industry, national differences and years. Existing research on Russia is more limited;  Two quantitative models were developed to find out the determinants of payout of dividends in Russia. Limitations of these models were discussed;  Empirical data was collected;  The collected data sample was described;  The models were applied and relationships were determined (main determinants are past dividends, government control, earnings and financial leverage). The results were interpreted;  Dividend determinants in Russia were contrasted to those in other countries. Similar determinants exist in Russia and worldwide, however Russia stands out in the sense that leverage positively impacts dividends and that growth and size were not detected to impact dividends;  The findings were discussed. Managerial and research implications were stated and a comparison with results of previous research was provided. Potential areas for improvement and recommendations for further research were outlined.