Drivers of Dividend Policy Development at Multinational Corporations in the BRICS Countries
Abstract. This article presents the results of the analysis of the dividend policy of transnational corporations (TNC) in terms of studying the phenomenon of dividend smoothing and determining the speed of dividend adjustment, performed on the basis of the sample formed by the BRICS countries. To answer the research question based on the analysis of existing academic literature, the author formulates two hypotheses that test the relationship between the payout policy and two factors in the formation of a dividend policy of TNC: dividend smoothing and the country of origin of TNCs. Hypothesis testing is carried out by regression modeling methods based on the Lintner model. The results of the study illustrate the confirmation of these hypotheses, which makes it possible to come to conclusions that: 1) dividend smoothing is a significant factor determining the payout policy decisions made by the TNC management; 2) despite the existence of significant differences in decision-making on dividend payments in Russia and India, there are no significant factors in the payout policy of the Russian transnational corporations and ones from Brazil, China and South Africa. The future research on this topic should conceivably be directed towards an investigation of socio-economic and socio-cultural factors of the country that provide differences in the speed of dividend adjustment in the payout policy of TNCs.
Keywords: multinational corporation, dividend policy, dividend smoothing, BRICS Highlights:
♦ the inclusion in the problematic field of research of TNCs as subjects of the international economic relations of issues related to the formation of financial policy depending on the specific conditions of the country of origin and/or origin of TNCs allows us to expand the understanding of the factors that determine their strategic development in specific national conditions;
♦ smoothing of dividends is one of the key aspects of the corporate dividend policy, determined by both financial (company size, capital structure, profit volatility) and non-financial (ownership structure, corporate governance) drivers;
♦ the policy of dividend smoothing is a fairly common phenomenon among TNCs whose country of origin is the BRICS countries, but there are no significant differences in the dividend policy of TNCs originating from Brazil, Russia, India, China or South Africa.
Vladislav S. Ruzinsky, Marina V. Kurnikova, Alexander F. Detsko - Samara State University of Economics, Samara, Russia