Home  Journals  Economic Analysis: Theory and Practice  44(395) - 2014 November

Analysis of factors affecting dividend policy in the Russian Federation

Available online: 30 November 2014

Subject Heading: METHODS OF ANALYSIS

JEL Classification: 

Pages: 26-36

The article examines the factors affecting the dividend policy in the Russian Federation, related to financial and economic indicators of a company, macroenvironment and company's policy with respect to dividends. The financial and economic indicators comprised the financial leverage and the Tobin coefficient. As the macroenvironment, the authors consider indicators of the crisis economy, inflation, taxes and industry sectors. The internal factors affecting dividend policy comprised depreciation allocations, equity capital and investment policy. Within each of the three blocks, the paper identifies sub-blocks. Each of the sub-blocks defines the corresponding hypothesis of tests. An empiric base of research included 516 observations within the period of 2002-2012, among which 246 represent observations with the absence of dividend payments. All financial indicators were taken from the Bloomberg and Ruslana database. The methodology includes the quantal-response method and a binary tree of classification. The results demonstrate that the financial leverage and the Tobin coefficient directly impact on paying dividends by a company. The paper also considers the direct link of the hypotheses associated with inflation changes in the portion of asset value. However, the hypothesis related to the global financial crisis impact on dividend payment has not been confirmed. The article identifies an inverse relationship between dividend payment and tax rate. The paper confirmed the hypothesis about the impact of capital growth on dividend payments. The calculated model confirmed the inverse dependence of dividend payment and amortization deductions. In the binary tree classification, the authors identified three terminal nodes of receiving dividend payments: for example, the first terminal node reflects a situation under which in case of increases in tax and capital payments, the probability of dividend payment will be almost 100 percent. The developed models enable to predict company's annual dividend payment with a high degree of probability.

Keywords: dividend policy, econometric modeling, forecasting, dividend payouts

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