Dividend Policies Of Chinese Listed Companies

Dividends Policy is one of the core content of corporate financial management of contemporary corporate, and it is also a main problem in western corporate financial management. This paper will first analyze the history of dividend policy of Chinese listed companies, then sum up the main problems existed in listed companies in issuing dividend policies, and lastly put forward some suggestion on this basis.This paper is divided into four parts. In part 1, this paper introduces some relevant definition of dividend policy, such as definition of dividend and dividend policy. Then reviews a great deal of relevant western dividend policy theories and concerning empirical studies on the basis of time sequence. These theories include "bird in the hand theory" , "MM theory" , "clientele effects theory" , "signal hypothesis" and "agency cost theory" . On this basis, this paper make a brief introduction of dividend theory drawn by our financial researchers published in some important magazines.In the second part, this paper analyzes the dividend distribution in Chinese listed companies from 1992 to 2001. It first introduces the distribution style in listed companies and makes a summary of dividend distribution through different dividend styles. It describes the history of each dividend distribution style and makes a descriptive statistics on dividend per share. Then it analyzes the characteristics of dividend distribution under three circumstances, which are dividend distribution under different earning level, under different growth stages and under different scale. After that, it analyses the proportion of non-dividend in listed companies from 1992 to 2001, and makes statistic description of non-dividend phenomena through different earning, different growth stage and different scale respectively. In the last, this paper introduces some activities that not conform to the standard.In the third part, this paper analyses the motives for dividendsdistribution through imperial methods. Motives of dividend decisions include internal and external factors. The external factors include structure of stock owners, macro economics status, the maturity of stock market, taxeffects and law restriction against dividend distribution. Because there are lots of internal factors that affect divi'dend distribution, this paper selects 221 listed companies that distribute pure cash dividend in Shenzhen security market (these companies issues A share only), and design 18 variables and 11 hypothesis to analyze internal motives of dividend distribution through regression analysis method and factor analysis method. Empirical result shows: 1)factors that influence dividend decision are: earnings per share 2000, earning per share 2001, net profit 2001, total asset in the end of 2001, net operating cash flow per share 2001 and net ratio of stock price to net asset per share; 2)the relation of pure cash dividend and total asset is different from the hypothesis, and describes the reasons; 3) through factor analysis, the factors can be divided into two groups: the earning capability and long-term capability of gaining profits.In the forth part, this paper puts forward some suggestions for the government to perfect companies' dividend behavior on the basis of discussion above.