Dividend Policy of Russian Companies: Cancel Culture Effect

Abstract

The paper is dedicated to the dividend policy of Russian companies under the sanctions pressure applied by the USA and the EU, which especially intensified in 2022 as a result of the changed global geopolitical environment. Cancel culture was used against Russia, complicating the financial, investment and operating activity of domestic companies. In the paper we analyze a sample of 73 Russian listed companies from non-banking sectors and 317 observations for 2017–2022. We consider the impact of sanctions against companies, boards of directors and CEOs on the company dividend policy. We used a logistic regression as a model to determine the probability of influence of changes in the studied variables on the decision concerning dividend payment. The sample is divided into two parts: 2017–2020 and 2021, and it illustrates companies’ behavior when the political environment in the world was stable and when the situation was aggravated. The research showed that sanctions against boards of directors and direct limitations of company’s operations had a negative influence on the probability of dividend payments while sanctions against CEO in the period of aggravation of political risks produced a positive effect. The cancel culture effect, i.e., the refusal of the USA and EU to cooperate with Russia and sanctions imposed on it, produced a significant negative effect on dividend payout by Russian companies.