An Empirical Study Of The Dividend Policy’ Impact On The Company’s Future Operating Performance

Since the birth of stock company, modern corporate finance activities as one of the three core content of dividend policy has been plagued by a number of academics, investors, senior managers of the company and corporate finance divisions. On one hand, it is a continuation of the financing and investment activities of listed companies and the inevitable results of financial activity of the company. On the other hand, scientific dividend policies not only establish a good corporate image, but also stimulate investors’ enthusiasm for continued investment, so as to create better conditions for the future development of the company and help develop a reasonable dividend policy of the company and improve enterprise values. So we can realize that a good dividend policy on the development of enterprise is essential. Therefore, to explore the relationship between dividend policy and the future of enterprise performance not only enriched the theory of dividend policy, but also has important practical significance.As there are a lot of differences between the main board and small and medium board in China, such as compared with the main board, small and medium board listed companies are in small scale, big management risk is more difficult in capital markets than main board listed company. Small and medium board listed company’s internal control is not as perfect as the main board companies and large shareholders are easier to manipulate stock prices and dividend policy of control and so on. Therefore, when we look at the effect of dividend policies on business performance, there is a need to separate the small and independent research.If not, the conclusions could be inconsistent with the objective reality. So far, however, scholars are more concerned about the motherboard market relationship between dividend policy of listed company and performance but without special research relationship between the small market and business performance. This article was based on small listed companies listed on the Shenzhen Stock Exchange as a research sample on December31,2007, using Excel and EViews6software, linear regression and variance analysis method to study on China’s small and dividend distribution of listed company from2007to2009and enterprise-related performance data for empirical research.This article is divided into six chapters:Chapter I is the introduction, which describes the background, meaning, the study purpose, the main contest and may innovation of this research. This chapter from the overall provides an overview.Chapter Ⅱ describes the content of dividend policy and the evaluation method of enterprise’s financial performance. This article from the dividend payment forms, dividend payment rate and dividend payment procedures, dividend payment policy introduces the dividend policy content. At the same time a simple review on the DuPont formula, Wall comprehensive scoring system, economic value added, balanced score card and Performance Pyramid performance evaluation methods.Chapter Ⅲ is to review the relevant research literature at home and abroad. This chapter is the literature review of the relationship between dividend policy and business performance from foreign and domestic aspects. From the existing literature, foreign scholars have done a lot of research on the analysis of information content and the Dividend Policy and Enterprise Performance in the study dividend policy, but did not reach a unanimous conclusion. Domestic scholars were based on the main board market in China for the study sample, mainly with the event method, the excess earnings method and their study mainly focused on testing whether foreign dividend policy theory is applicable in our country.Chapter Ⅳ is on small dividend distribution of listed companies in recent years in China for statistical description and summarizes the distribution of its characteristics. Compare to the listed companies, the dividend distribution of China’s small and medium enterprise board listed companies characterized by more company for distribution of dividends, but twice the distribution of the company less, dividend mainly in cash dividend, the dividend distribution policy is more casual and lack of stability and continuity.Chapter V studies the dividend policies on small and the performance of listed companies in China which is an empirical analysis. The content includes study design, sample selection, variable assumes that positive results and analysis of the empirical results. By studying on China’s small and dividend distribution of listed company from2007to2009and enterprise-related performance data for empirical research, the results include:It verify that listed companies with high cash dividend payment rate is better than the listed companies with low cash dividend payment rate in the next annual business performance. From the dividend paid formal point of view, next year cash dividend distribution and enterprise performance is proven, while stock dividends, capital increase and future operating performance are related have not been verified. Deferred effect of the research dividend policy, the cash dividend on the company’s future operating performance, the deferred effect be verified, but the stock dividend on the deferred effect of the future operating performance has not been verified. And the empirical results are analyzed in this study.Chapter VI is the conclusion, suggestions and prospects. It mainly introduces the conclusions of this study, and makes some suggestions based on empirical research results on the dividend policy of China’s small board of listed companies, and finally explains the limitations of this study and prospects for the future research directions.