Distinction And Analysis Of Dividend Distribution Policy Of Listed Companies Of China And The United States

The main role of the stock market in our country is:1. Functions of investment and financing. Investors convert savings into investment and make full use of capital through the capital market. Listed companies raise a lot of money through the capital market.2. Optimize the allocation of resources. The fittest price changes make the capital flow to the high return rate of industry or business, making capital efficiency as high as possible, so as to realize the rational allocation of capital. The two points above make the stock market natural regulator of China’s macro economy, become a reservoir of currency and a vent of inflation.3. Speeded up the growth of social wealth, especially in financial assets. From June2001to the end of2011, ten years have passed, and China’s a-share market changed. Total number of listed companies has increased from more than1000to more than2300. Shanghai and Shenzhen two cities’market capitalization have grown to about23trillion Yuan by5.3trillion Yuan, and the current market and circulation capital have been growing especially fast. From what has been discussed above,recently Chinese listed companies have grown well, and the capital market has gradually become mature, but in the year2011, the a-share listed companies, which didn’t pay dividends proportion, remained close to29.74%. The dividend distribution policy, the financing decision and the investment decision are the three key decisions taking a pivotal position in the operation and management of the listed company. Because Chinese capital market is still in its young age, the practice of Chinese listed companies’dividend distribution policy faces some common problems:the number of the cash dividend distribution listed company is relatively less, a low level of cash distribution,the dividend distribution of listed companies is experiencing a serious problem of short-term behavior; the implementation of the dividend policy lacks stability and continuity. The listed companies in the developed countries such as America and some European countries, because of the capital markets’ more completed development and higher level of maturity, their dividend policies has a high rate of cash dividend form of dividend distribution and a relatively stable dividend payment. But due to the difference of equity structure, capital market regulation mechanism and legal policy, optimizing our country capital market and studying the issue of dividend distribution of listed companies in China will not be able to fully comply with American. So comparing dividend distribution of listed companies in China and the United States and to study the dividend distribution behavior of listed companies in China on the basis of full grasp of China’s specific national conditions has important theoretical and practical significance.This article analyzes practical situations and differences of the dividend distribution policy of listed companies in China and the United States using the method of comparative analysis, deeply analysis the causes, and refer to western dividend distribution theory and the experience of dividend distribution policy of listed companies in the United States to put forward suggestions for further improving Chinese listed companies’dividend distribution policy.The main idea of the paper is as below. First, the theories of dividend policy will be introduced to describe the definition of dividend policy, its basic types, the scheme determination of dividend plan, stock split and stock buybacks. I will also analyze how western mainstream theories of dividend distribution policy are applied to the Chinese listed companies. Second, I will summarize the situation of the implementation of the dividend policy of the listed companies in both China and America. I will compare the difference of the dividend distribution policy, the mode of distribution, the pay level, and the stability of the distribution behavior of the listed companies in the two countries. Then I will expound the reasons of the differences of the listed companies’dividend distribution in China and America, including the difference of equity structure, capital market regulation mechanism, and the legal policy. In the final part I will give suggestions on regulating and improving the Chinese listed companies’dividend policy:1, to strengthen the external constraint of listed companies;2, to optimize the governance structure and the dividend distribution policy of listed companies;3, to cultivate institutional investors, and make them become the dominant force in the stock market;4, to educate the investors with right investment philosophy.The innovation of this article is:1. By systematically reviewing and discussing western dividend theory, and combining with China’s national conditions and the actual situation of China’s listed companies, this article simply analyze the study of dividend theory and reality.2. From the perspective of corporate governance and combined with the equity structure of listed companies, this article simply analyzes the intensifying "not assigned" phenomenon, and puts forward some feasible advice and suggestions.3. Analyzed Chinese listed companies dividend policy transmission signal from the perspective of information economics. Please oblige me your valuable comments on my defects and shortcomings due to restrictions.