Dividend Smoothing in Brazil: An examination of the outcome and the substitution models

DOI: https://doi.org/10.4025/enfoque.v40i1.48808
Keywords: Dividend smoothing; outcome model; substitution model.

Abstract

This paper aimed to identify and understand the dividend smoothing pattern practiced by the Brazilian companies listed on the Stock Exchange (B3). Considering the Brazilian capital market degree of development and the institutional characteristics derived from the code law legal regime, dividend smoothing was investigated in light of outcome and substitution models. The methodology was conducted by estimating Lintner’s (1956) partial adjustment model through fixed effects panel data regression analysis. As results, this study offers evidence that, in Brazil, there is a lower propensity of dividend smoothing and it may be related to the degree of the Brazilian capital market development and the corporate governance environment deficiencies derived from the regime legal code law, which implies the acceptance of the outcome model.

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Author Biographies

Rodrigo Vicente Prazeres, Universidade Federal de Alagoas

Doutor em Ciências Contábeis pela Universidade Federal de Pernambuco

Professor Adjunto da Universidade Federal de Alagoas

Juliana Gonçalves de Araújo, Universidade Federal de Pernambuco

Doutora em Administração pela Universidade Federal de Pernambuco

Umbelina Cravo Teixeira Lagioia, Universidade Federal de Pernambuco

Doutora em Administração pela Universidade Federal de Pernambuco

Professora Associada da Universidade Federal de Pernambuco

Published
2020-11-19
How to Cite
Prazeres, R. V., de Araújo, J. G., & Lagioia, U. C. T. (2020). Dividend Smoothing in Brazil: An examination of the outcome and the substitution models. Enfoque: Reflexão Contábil, 40(1), 49-65. https://doi.org/10.4025/enfoque.v40i1.48808
Issue
Vol 40 No 1 (2021): Enf.: Ref. Cont.
Section
Original Articles

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