Brazilian Companies’ Dividend Payout in a Political Uncertainty Scenario

Abstract

The analysis of the determinants of the dividend payout policy becomes even more relevant in a context of crisis. In this scenario, companies wonder which strategy shall prevail—either to keep the payout ratio constancy to signal to the market positive aspects about themselves or to adapt it to the external conjuncture, protecting themselves from future uncertainties. This being so, this study aims at identifying the determinants of the dividend payout policy, in the period before and after the former President Dilma Rousseff’s impeachment, by using logarithmic and probabilistic regression models. To this end, a sample of Brazilian non-financial publicly-held companies is considered, whose data are obtained from the Capital IQ base. As a result, the corporate dividend policy is identified as not being affected by the market environment. Such a fact indicates that Brazilian companies choose to maintain their dividend payout policy, even in scenarios of political uncertainty. This study differs from the others for analyzing the relationship between dividend payout decisions, whether in times of stability or in political and economic crisis.