Factors affecting the dividend policy of non-financial joint-stock companies in Ukraine

Abstract

Dividend policy, as part of corporate governance, is largely dependent on the insti- tutional environment in which companies operate. he study aims to determine fac- tors afecting dividend policy in the conditions of the Ukrainian underdeveloped stock market, legal insecurity of minority shareholders, high cost and concentration of capital. For this purpose, hypotheses about the impact of a company’s inancial state, size, business risk, and ownership structure on dividend payments were tested using a sample of 58 Ukrainian non-inancial public joint-stock companies and applying Interactive tree classiication techniques (C&RT). he resulting classiication model for predicting dividend decisions correctly classiies 92.86% of companies that paid divi- dends and 93.3% of companies that did not. he indings, based on the classiication tree and importance scale, prove the hypothesis that companies in which individuals and institutional investors have a controlling interest are more likely to pay dividends than other non-state companies. he inancial indicators accurately classify only those irms that do not pay dividends, and business risk does not afect classiication accu- racy at all. he paper substantiates the ways of using the study indings for economic regulation, protection of minority shareholders’ rights, and proliferation of modern corporate governance practices.