Government Influence on Dividend Payout in Russian Companies

The main objective of this work is to determine whether the Russian government can influence on investors’ expectations and the dividend payout of the government corporations by the issuance of the mandatory rate. The work is based on the research in the form of the event study. The initial samples contained 50 government and 50 private companies. The main hypothesis is that the government decree had a positive influence on abnormal returns, stock prices and dividend payout of state corporations, which had positive net profit in 2015 year. The intermediate result is that there are insignificant cumulative excess returns for both types of companies. Then, companies with negative profits are excluded from the samples, because investors will not expect that this company will pay dividends and the government decree cannot affect on their expectations. The event study on reduced sample of government companies shows positive and significant cumulative abnormal returns. It confirms the main hypothesis because minority shareholders believe that, after the government decree, the state corporations actually will increase dividends and will finance investment projects by external funds. It is good news for investors because their income becomes more predictable, therefore, the Russian government can achieve not only the aim of increasing funds for the state budget but the aim of increasing value of its companies.