Discussion On The Applicability Of The Life-cycle Theory Of Dividend Policy Of Listed Companies In China

As one of the three major financial decisions, the listed company’s dividend policy hasalways been a hot research scholars. Since the1960s classic Miller&Modigliani dividendpolicy irrelevance, there have been a lot of theoretical and empirical research scholars aboutdividend policy. While on the dividend policy of the theoretical and empirical research hasbeen constantly enriched, but academia has not been on the dividend policy to reach aconsensus. How to develop listed company’s dividend policy remains to be further research.From the corporate life cycle perspective, this article studies the dividend policy of listedcompanies in China, to test whether the listed company’s dividend policy in line with thelife-cycle theory. In view of this, using a combination of cash flow method, the enterprises ofChina’s Shanghai and Shenzhen stock market are divided into a period of growth, maturity anddecline. This article uses a variety of mathematical analysis methods, such as samplesdescriptive analysis, parametric tests and non-parametric tests, to Study of the cash dividendand stock dividend of three stages of enterprise. The empirical results show that the life cycletheory does not apply to the dividend policy of listed companies in China, that China’s listedcompanies is not strictly in accordance with which the life cycle stage to develop its dividendpolicy. Compared to the stock dividend policy, the cash dividend policy of listed companies inChina is closer to the life cycle theory. Then, dividing the sample into2006-2008and2009-2011two groups, we respectively compare two groups of cash dividend policy and stockdividend policy analysis, to observe the impact of regulatory policy on the dividend policy oflisted companies in2008. The test results show that, the2008regulatory policy on the dividendpolicy of listed companies to develop significant policy effect does not exist. Finally, theanalysis of the life cycle theory does not apply to the dividend policy of listed companies inChina, and on this basis, the corresponding policy recommendations.