Dividend Policy: Evidence From Emerging Markets

Abstract

This paper examines the importance of different factors affecting the dividend policy of companies in emerging markets. Econometric techniques of panel data analysis were used to estimate and explain dividend policy in Russia, India and China from 1995 to 2008. Such length of the time-series allows looking at the changes in dividend policy before and after crises (default in Russia in 1998, Asian crisis 1997-1999). It was found out that dividend policy before and after crises had different drivers. Profitability was the main factor which determined dividend policy before crises and afterwards dividend policy became more complex. Moreover before crises all deviations from the average were explained by random factors but not by the individuality and specific characteristics of the firm. E-mail: npirogov@hse.ru