Earnings Quality And Cash Dividends

Cash dividends distribution has not been very common in Chinese listed companies. This paper filter the data of 2005-2007's stock market except for the Insurance and finance industry, research the relation of earnings quality and cash dividends policy from the earnings continuity perspective as well as the relation of the earnings quality and ownership structure in Chinese listed companies. There are few studies about this topic in financial management. Some front research mainly attention the relation between the dividend policy and corporate governance, earnings quality itself and various methods of earnings quality appraisal system other than measuring the relation of earnings quality and cash dividends policy, also there are few studies to research the influencing factors with the autoregressive process and binary logistic regression model at the same time. After the empirical analysis, the paper found out there were prominent relationship between earnings quality and cash dividends policy. Cash dividend and earnings quality has a significant positive correlation in a cash dividend sample. Concentration of equity and cash dividend policy was a significant positive correlation and also the company's growth and cash dividend policy changes in the same direction. So the conclusions of this paper support the "tunneling" theory.There are two innovations in this article: Firstly, the most core content in this article is that I analyzed the earnings quality towards especial sample companies and the influence of earnings quality to the cash dividends policy in a new angle. Secondly, I decomposed of the total surplus for the operating profit and non-operating profit for better research and at the same time in analyzing the stockholder's concentration degree I used the first shareholder holdings, the top three shareholder holdings and the top five shareholder holdings to do this job.