Empirical Research Between Cash Dividend Policies And Sustainable Growth Of The Listed Companies In China

The sustainable development of society and economy needs the support from natural resources, human resources and environment. Provided resources got exhausted and environment got damaged, the development of society and economy will lose the foundation. Likewise, the sustainable development of company also needs the support of capital and environment. Suppose a listed company suffered capital exhausting and environment damaging, the sustainable development of this company will lose its foundation as well. Hence, companies taking sustainable growth management as their core strategic management are imperative under the situation. In recent years, the research on sustainable growth is limited to the analysis of theoretical deduction by way of qualitatively analyzing the financial strategies that the companies implement when they suffer too slow or too fast development, while to the feasibility and effectiveness of those financial strategies lack of empirical testing. By using the cumulative abnormal return and multi-regression models, this paper will carry out an empirical analysis of the 1999-2003 financial data drawn from the 190 sample listed companies that put into the stock market in 1997. Initial conclusion is achieved that when companies suffer unbalanced development, most of the listed companies in this country do not preferentially adopt the financial strategy of dividend policy. Moreover, the responding period of the cash dividend market is relative short, and the stability and reactive ability of the stock market is poor. Additionally, the investors do not regard the financial strategies of the listed companies, combined with a less effective communication of cash dividend relative to foreign countries. Consequently, in order to improve the sustainable growth of listed companies, it is suggested that listed companies upgrade the management status, employ excellent enterprisers to take the management position, perfect the manager reward system and perfect legal entity management structure, foster sustainable growth thinking for the management. Moreover, it is suggested that the CSRC (China Securities Regulatory Commission) establishes rigorous standards of issuing new shares, strengthens financing management to standardize the stock market and increases the proportion of current shares, encourages organization investors to boost up the stabilities and maturities of the stock market.