Cash Divident Test

Dividend policy is how to distribute earning to stockholders. Dividend theories began with Miller and Modigliani(1961) and have been developed into client theory, agency theory and signaling theory.In china, many scholars began to study this problem when the stock was introduced. And now this study became more mature and grew faster than before. Recently China stock market developed so fast.More and more company care dividend policies. My research is based on the company which have distribute cash dividend constantly from 2000 to 2006.Although they continue to make cash dividend, but the number is very slow. Why?The first part summarized the past researches from home or abroad. And this part supports the later analyses at theory.The second part is about how to choose the sample and which variables should be chosen. The sample cross the time from 2000 to 2006 with 7 years. And the necessary condition is the dividend policy should be larger than zero and limited'A'stocks.127 companies were listed at the end. And then the variables were analyzed by whole or by single to find their statistical characters.The third part is about to set up a skilful model to analyze them. Because of especial stock structure and market environment, every company has its special characters. What's more, because the recently years the stock transform quickly, the market appeared time characters. So I choose cross-section fixed effect and period fixed effect statistical methods. As to the further cash flow which can not be estimate directly but also affects the dividend policy, I chooseⅣmethods to estimate it.At the end, I analyzed the result by using agency theory and signaling theory. I found the agency is existed in the sample and the signaling theory is effective. At the end,I have give some countermeasures to reduce the problems.