Finance and Credit

The impact of information asymmetry on the dividend policy

Vol. 23, Iss. 23, JUNE 2017

PDF  Article PDF Version

Received: 19 April 2017

Received in revised form: 11 May 2017

Accepted: 30 May 2017

Available online: 29 June 2017

Subject Heading: THEORY OF FINANCE

JEL Classification: C39, D82, G35

Pages: 1334-1342

Fedorova E.A. Financial University under Government of Russian Federation, Moscow, Russian Federation

Teterina E.A. Financial University under Government of Russian Federation, Moscow, Russian Federation

Subject The article considers internal factors influencing the dividend policy of companies. The focus is on the information asymmetry (which is measured by a deviation of actual earnings from expected), and on how a form of ownership (State or private) affects the information asymmetry and the entire dividend policy.
Objectives The study aims to explore the dependence of dividend payments on internal indices and characteristics of the company, to find out whether the existing dividend theories are applicable in the Russian reality.
Methods The empirical basis includes data on 50 Russian enterprises for the period from 2009 to 2015. We selected several variables to perform a regression analysis (the least square method).
Results The study reveals an inverse relation between information asymmetry and dividend payments, in other words, when the asymmetry is higher, there is less chance that shareholders receive their dividends. We divide companies in two groups: State-owned and private. The analysis shows that State-owned companies pay dividends more often.
Conclusions In Russia, payment of dividends is not an instrument for communicating information to capital markets.

Keywords: dividend policy, information asymmetry, State-owned company, dividend signaling, signaling hypothesis


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