Methods of the Analysis and Development Models of Companies’ Dividend Policy in Emerging Markets

The general goal of this paper is a study and improvement of the existing instrumental and methodological framework for analysis and decision making process linked with formation of dividend policy depending on the functioning conditions of companies in emerging markets. The research questions: to expand a model of dividend policy formation and to test it on the sample of the BRICS countries; to study dividend strategies «Dogs of the Dow» on the Russian stock market; to develop a methodology that describes the decision making process in the field of dividend policy; to identify the ways of improving the management organization of company's dividend policy and to reveal it on the PJSC «LUKOIL». In the first chapter the traditional and behavioral theories of dividend policy and their empirical verifications were investigated. The second chapter presents the regression analysis of dividend policy formation in emerging markets based on traditional and behavioral theories. The sample includes 1007 companies of BRICS countries from 2006 to 2013 and the data are obtained from the “Thomson Reuters Advanced Analytics” database. The findings indicate an extraordinary importance of the behavioral concept which shed a new light on the issue in choosing appropriate dividend policy. The third chapter is focused on development of the approaches to formation and analysis of companies’ dividend policy in emerging markets. The dividend strategies "Dogs of the Dow" were tested in the work, they provided a higher return than the market portfolio. Furthermore, the economic conditions that influence companies’ dividend policy were identified. Depending on these conditions the recommendations for improving existing dividend policy were proposed and an economic impact related to implementation of the proposed measures was calculated. Moreover, the paper demonstrates how suggested recommendations for optimization of management organization of dividend policy apply in the PJSC "LUKOIL".