Determinants of Dividend Policy of Russian Companies

The purpose of the present research paper was to discover the factors that determine the dividend policy of Russian companies. In order to achieve that goal various studies were examined. The main focus of my work is the Lintner’s concept of dividend smoothing and the influence of ownership structure on dividend policy. A sample of companies was selected using the Expert rating of year 2009 and then data was downloaded from Datastream and Skrin to analyze the factors that determine the dividend policy of Russian firms. In addition, hypotheses were compiled and three specifications of the model were constructed for their verification. Analysis of the proposed hypotheses was carried out using econometric models in the Stata program. The conclusions of the work are the following. Firstly, all three specifications affirm Lintner’s theory of dividend smoothing. Secondly, companies under legal foreign proprietorship tend to pay lower dividends. The rationale behind that outcome is the incentive of managers of a reported company type to transform money to shareholders in a different way.