Dividend Policy Research Based On The Enterprise Life Cycle Theory

Dividend Policy, as an important part of modern corporate governance, has prompted intense discussion among western financial scholars all the time. Many researchers attempted to analyze dividend policy from different angles. In recent years, with the emerging of the theory of enterprise life cycle, some researchers started to dissect the listed companies' dividend policy from the perspective of the life cycle, and drew the conclusion that companies in different phase of the whole enterprise life cycle should implement corresponding dividend policies. This article focus on the relationship between enterprise life cycle and dividend policy, trying to reveal the differences of China's listed companies' dividend policy in microcosmic view based on the theory of enterprise life cycle, and using an empirical way to examine the influencing factors of the dividend policy during each phase of the enterprise life cycle.This article first summarizes the research results of the theory of enterprise life cycle as well as the relevant theories about dividend policy in western countries. Afterwards, it classifies all the listed companies into respective phase of the enterprise life cycle using cash flow combination approach, and makes reasonable assumptions on nine aspects, such as corporate profitability, ownership structure, growing capability, financing capability, etc. And then verifies the result using descriptive statistics, Logit regression analysis and multivariate regression method in three aspects:the method of dividends payment, the tendency of dividend distribution and the dividend payout level.The results of the validation shows:China's listed companies tend to use cash dividend as a main payment method, and more specifically, companies in the phase of growing stage prefer to use the method of cash dividend as well as a high payment level, the influential factors which affect dividend policy also shows a significantly cyclic nature; Listed companies distribute dividends or not has strong and positive correlations with the size of the company, the profitability, the financing capability, whether dividends already distributed in the first half of the year, as well as the profit quality, and has little or no relations to the other factors; The correlation between the dividend payout level and the size of the company,the profitability, the company's solvency, the capital adequacy, the history dividend payout level is also positive, but the dividend level is inversely related to the growing capability. Contrary to the assumptions, the shareholders'balance has a positive correlation with the dividend payout level, while the dividend payout level inversely relates to the financing capability and profit quality; Even more the research finds out that, regardless of the tendency of dividend distribution or the dividend payout level, influential factors constantly change during each phase of the enterprise life cycle, and the theoretical results are more appropriate for the more matured listed companies. Finally, according to the conclusion of the study, some proposals and suggestions are made. Also, the limitations of this study and future research direction are pointed out.