Determinants of Dividend Policy in Russian Companies: Ownership Structure Effect

Companies’ decisions regarding its dividend policy may be determined by both fundamental and non-fundamental factors as well as the specifics of the institutional environment in which a company operates. The purpose of the current research paper is to determine if companies’ dividend policy is influenced by ownership type, particularly, the presence of state, foreign, and managerial ownership is investigated. The impact on both the propensity of a company to pay dividends and dividends amount is analyzed by building and estimating logit regression and Tobit regression, respectively. The sample employed in the current research includes 716 observations for 149 leading Russian companies traded on MOEX from 5 industries over the period from 2004 to 2015. According to the empirical analysis, state and managerial ownership decrease the likelihood of dividend payments. On the other hand, if a company already pays dividends, these ownership types positively affect the amount of dividends paid. Foreign ownership does not have a statistically significant impact on companies’ dividend policy. The results obtained are consistent with signaling and agency theories.