The Role of Government Shareholding in the Brazilian Dividend Policy

Abstract

This study examines the influence of government shareholding on the dividend policies of Brazilian companies. We analyze a comprehensive dataset of publicly listed Brazilian firms from 2005 to 2019, employing econometric models to investigate the relationship between government ownership and dividend payouts. Our findings suggest that government involvement, particularly direct control through majority stakes, is associated with lower dividend distribution. This effect is more pronounced in state-owned enterprises and firms operating in strategic sectors. The study contributes to the literature on corporate governance in emerging markets by highlighting the unique role of government as a significant, and often controlling, shareholder.