Effects Of Special Assets Cash Dividend Policy

Corporate dividend policy has always been a classical topic of finance research for decades. Since the inaugurated exploration of Lintner in1956, researches on dividend policy become even newer as time goes by. Heretofore, scholars have brought forward many theoretical and empirical achievements on dividend policy, especially on it’s influencing factors, focusing on factors like profitability, investment opportunity, firm size, growth phrase, cash flow, enterprise life-cycle, ownership structure, state system and industry factor. However, it is a pity that most of the previous researches were based on the hypotheses that all the enterprise assets were redeployable, never paying special attention to the specificity problems caused by unique assets, thus ignoring the effect of asset specificity on dividend policy.This thesis brings asset specificity, as an important firm characteristic, into the analysis framework of cash dividend policy. We take balanced panel data of709Chinese listed companies from2006to2010as research object, using analysis tools such as Logistic Regression Model, LS Model, Fixed Effects Model and Random Effects Model, to explore the relationship between asset specificity and cash dividend policy. When other main influence factors of dividend policy are under control, the empirical conclusions come out to be consistent with the theoretical hypothesizes.The empirical results show that:asset specificity presents significant negative relationship with both cash dividend payout tendency and cash dividend payout level. This indicates that the management of listed companies would take the company’s assets condition into consideration when making cash dividend payout decisions. Since asset specificity would reduce the liquidity and mortgage assurance capabilities of firm assets, thus affects it’s borrowing capacity, the company would firstly choose endogenous funds which are cheaper than exogenous funds as the sources of funding, consequently, listed company tends not to pay or pay less cash dividend in order to meet the need of high level asset specificity for endogenous capital. Besides, in the view of the control variables, variables such as firm size, profitability, financial leverage and cash flow capacity are all significantly related with cash dividend policy. This implies that corporate characteristics factors can explain listed companies’cash dividend policy to a great extent. The variables of corporate governance, such as largest shareholder’s ownership proportion, ownership concentration and the ownership proportion of institutional investors all past the significant tests, which indicates that corporate governance factors are important influencing factors on cash dividend policy that shouldn’t be ignored.