How the Dividend Policy of Russian Companies From 2005 to 2024 Affected Capitalization and Investor Return
https://doi.org/10.18288/1994-5124-2025-3-6-37
Abstract
The article analyzes data on dividend payments for shares listed on the Moscow Stock Exchange from 2005 to 2024 and examines major changes in corporate dividend policy and their effects on capitalization and shareholder return on investment. The authors used quantitative analysis, total yield decompositions, and various construction strategies for managing factor portfolios. Since 2012, many companies have increased dividends to compensate for slowing share price appreciation caused by adverse external shocks and a decline in demand. This reaction increased total shareholder returns but also required additional financial support to underwrite the fiscal deficits of state-owned enterprises (SOEs). Nevertheless, the capitalization-to-GDP ratio and the prices of high-dividend companies dropped, and the risks of deep and long dividend gaps increased and was amplified by private investors’ irrational behavior. From 2005 to 2024, more than half of dividends were paid by only the six largest companies; dividend payouts from SOEs totaled more than those from private companies; and about 60% of dividends were distributed to beneficiaries who did not participate in the formation of a liquid secondary equity market. The increase in payments by companies of the third tier was a positive trend in dividend policy from 2022 to 2024. The authors found evidence confirming the Modigliani-Miller hypothesis that the distribution of net profits has little impact on share prices. Growth of capitalization and total shareholder return should be based on a company’s net profit growth and a rational allocation of it between dividends, investment, and other purposes. The investment climate, macroeconomic stability, and complete disclosure are all essential factors driving greater demand for stocks.
Keywords
dividends,
state-owned companies,
financial markets,
portfolio management,
dividend policy,
private investors
JEL: G30, G32, G35, G38, O16, D22
Supporting agencies: The article has been prepared as part of the RANEPA state research assignment program.
About the Authors
A. D. Radygin
RANEPA
Russian Federation
Russian Federation
Alexander D. Radygin, Dr. Sci. (Econ.), Professor, Director of the Institute of Applied Economic Research
82, Vernadskogo pr., Moscow, 119571
A. E. Abramov
RANEPA
Russian Federation
Russian Federation
Alexander E. Abramov, Cand. Sci. (Econ.), Head of the Laboratory for Analysis of Institutions and Financial Markets, Institute of Applied Economic Research
82, Vernadskogo pr., Moscow, 119571
M. I. Chernova
RANEPA
Russian Federation
Russian Federation
Maria I. Chernova, Cand. Sci. (Econ.), Senior Researcher at the Laboratory for Analysis of Institutions and Financial Markets, Institute of Applied Economic Research
82, Vernadskogo pr., Moscow, 119571
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Review
For citations:
Radygin A.D., Abramov A.E., Chernova M.I. How the Dividend Policy of Russian Companies From 2005 to 2024 Affected Capitalization and Investor Return. Economic Policy. 2025;20(3):6-37. (In Russ.) https://doi.org/10.18288/1994-5124-2025-3-6-37
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