Market performance and the distribution of dividends in companies belonging to BRICS

Abstract

This study aimed to analyze the influence of market performance on dividend distribution of BRICS companies. Descriptive, documentary and quantitative research was performed by panel data regression. The sample consisted of 299 companies from Brazil, 636 from Russia, 1195 from India, 1807 from China and 271 from South Africa. The results indicated in view of the influence of market performance on dividend distribution that the PCD index has an influence on dividend distribution of companies from Brazil, Russia, China and South Africa and the PSR ratio proved to be significant and positive for this ratio in India and South Africa. Inflation rate, information asymmetry and market performance influenced the distribution of dividends among companies in the countries of China and South Africa. These results reveal that the macroeconomic and information asymmetry factors cannot be disregarded, since they help in explaining the behavior of companies in the financial market. It was concluded that there is an influence of market performance in the determination of dividend payment in the BRICS countries, as the results revealed
that the higher the PSR index that indicates the value of equity in relation to company revenues and the PDC index that represents the proportion of the profits that are destined to the shareholders, more favorable tends to be the distribution of dividends. The research contribution is the establishment of a direct relationship between market performance and dividend distribution. The results will assist managers and investors in making financial decisions.