Will Company Life Cycle Influence Dividend Policy?

Dividend policy is an important part of modern corporate management, and it isalways a hotpot in the Western academic experts. Many scholars try to interpretresearch on dividend policy. With the rise of the company life cycle theory in recentyears, the company life cycle theory is introduced into the listed company’s dividendpolicy by Western scholars. They support that the company in different life-cyclestages should take appropriate dividend policy. This paper studies on this topic, thecompany life cycle theory, try to research for the characteristics of the cash dividendpolicy based on the listed companies in China and to explore dividend policy factorsby using empirical research method.First, in the literature review, we review the Western dividend policy theories,summarized the current study results and the Chinese research dividend policy. Withthe difference of the western dividend policy, many Chinese scholars empirical testthat the major shareholders of listed companies through cash dividend misappropriatesmall dividend interest before the reform of share rights splitting, called for“tunneling”. In addition, our special ownership structure of listed companies hasvarying degrees of impact on dividend policy. After the reform of share rights splitting,these effects have a corresponding improvement. Second, the paper focus on thedomestic and foreign dividend policy described the life cycle theory, particularly inthe West dividend policy development process of the life cycle theory and research.Our scholars obtained theoretical results. Again, the product life cycle and life cycletheory to distinguish, and the company life cycle proxy variables summarized. Thispaper selects a combination of cash flow characteristics as the company life cycleproxy variable. By analyzing dividend policy on relations with the company life cyclehypothesis is proposed. Finally, on the basis of the existing research, chose sevencontrol variables into empirical model. After describing statistics by the controlvariables, the study empirical test hypotheses.Based on conclusions in this paper, it is proposed that the different listedcompanies’dividend policy should be made from the company’s state of development,especially early-stage listed companies. Growth and maturity listed companies at thisstage dividend policy should ensure the stability and sustainability. What’s more,China Securities Regulatory Commission should dividend several stages dividend policy when madding policies. For example, retained earnings assets gestures dividedinto several phases, each provides a different dividend ratio. Not only encourage listedcompanies to pay dividends, but also give full consideration to the differencesbetween listed companies. And make up the short of the only standard.