The Determinants of Dividend Payment: the Effect of the Legal and Contractual Obligatory Minimum in Brazilian Companies

Daniel Francisco Vancin () and Jairo Laser Procianoy ()
Additional contact information
Daniel Francisco Vancin: Universidade Federal do Rio Grande do Sul
Jairo Laser Procianoy: Universidade Federal do Rio Grande do Sul Universidade do Vale do Rio dos Sinos

Brazilian Review of Finance, 2016, vol. 14, issue 1, 89-123

Abstract: This study seeks to identify the effects of the mandatory dividend in determinants of companies listed on the BM&FBovespa to pay dividends, demonstrating that the methodology proposed is a step forward in the pursuit of these determinants, mirroring the reality of actual willingness to pay. To accomplish this was used a tobit model with instrumental variables, separating the sample into three groups: the Complete Sample, ABOVE group and MINIMUM group. In total, were analyzed 1531 dividend distributions from 2007 to 2013. It was found that there is strong empirical evidence that companies paying dividends above the mandatory feature different determinants of those who only pay this. Thus, the existence of companies in the sample who pay only the mandatory dividend influence on the regression coefficients, resulting in significant biases for dividend determinants in Brazil. Because companies that pay above mandatory are the real makers of the decision to pay dividends, as companies only pay the mandatory simply comply with the legislation.

Keywords: dividend; law; Brazil; dividend; law; Brazil (search for similar items in EconPapers)
JEL-codes: C26 G35 K10 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

Downloads: (external link)
http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/download/53448/59140 (application/pdf)
http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/53448 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:brf:journl:v:14:y:2016:i:1:p:89-123

Access Statistics for this article

Brazilian Review of Finance is currently edited by Marcio Laurini

More articles in Brazilian Review of Finance from Brazilian Society of Finance
Bibliographic data for series maintained by Marcio Laurini ().