Study On The Dividend Policy Of High Technology Companies

In the last part of 20^th century, high technology which is represented by the electronic and information technology, biological technology, new material, new energy, and aerospace technology, developed quickly, pushed the developed countries in America and Europe entering a gold time of grow continually and rapidly, improved the social production forces, and changed the people's way of production and mode of daily life. All the governments have known that the development of high technology industry can improve the economic situation and increase the overall strength of the country. Currently, high technology companies in China have not developed enough, and the skills in management of these companies are lag behind. Some work must be done to improve the situation. Having peculiarities in development courses, human resource, investment and capital structure, high technology companies should have their own dividend policy which differed from other industries. And for high technology companies, dividend policy is important because the payout decision affects not only the circulate funds and the capital structure, but also the investment and the growth.This paper reviews the classic literature and theories, uses both theoretical studies and empirical analyses, discusses the traits of payout of high technology companies in China and analyzed the cause of this constitution. The result shows that the ratio of the companies payout in high technology industry is not lower than the mean of all the companies, the payout ratio is low and a few companies pay much cash dividend. Besides, using regression analysis, we find that there is a notable relation between the dividend and the investment, moreover, there is a relation between the dividend and the growth.Differing from traditional studies on dividend policy, this paper focused on high technology companies, which seldom been the study object. So the study of this paper is in a new field of study on dividend policy. On the other hand, to attest the essential of dividend policy for high technology companies, it analyzed the relation between the dividend and the investment and the relation between the dividend and the growth. All the result show that the dividend policy of high technology companies in China still lack of the capability of foresee, and can not deal with the relationship between the current return and the growth. Finally, this paper raised some advice on how to formulate the dividend policy to high technology companies in China.