The effect of the quality of corporate governance on the dividend policy of companies in the BRICS countries

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The article presents the results of a study aimed at determining the nature of the influence of the quality of corporate governance on the dividend policy pursued by companies in the BRICS countries. This relationship is determined based on empirical research on a sample of 122 large public corporations of the BRICS countries (based on 610 observations) for the period from 2015 to 2019. The study uses Tobit, random effects, fixed effects, and OLS. The results of this study show that the quality of corporate governance significantly negatively correlates with dividend payments of companies. This means that companies in the BRICS countries adhere to the dividend substitution model (proposed by La Porta), or, in other words, compensate for the poor quality of corporate governance with high dividend payments. Taking into account the results of the study, in the final part of the article, the main methods of improving the quality of corporate governance are proposed, which can contribute to increasing the value of companies in the BRICS countries.

JEL classification: G30, G35.
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