An Empirical Study On Dividend Signal Effect Of Small And Medium Enterprises

Dividend policy plays an important role in the corporations’management decision-making, is one of the main financial decision. The management of the listed Corporation can convey different information to investors through different dividend policies, so the dividend policy is a very important tool for listed Corporation to deliver signal transmissions to investors. The core viewpoint of signal transmissions is:in the market efficiency is not fully effective, incomplete information symmetry, the listed Corporation’s management can make different dividend policies to investors the information of company’s current business and prospects for development in the future, in order to keep the stable mentality of investors and achieve financial decision. If the reasonable dividend policy is being used, there is an information balance between listing Corporation and investors, investors can judge the development of listed Corporation from the market reaction. Chinese securities market started late and they are less developed. The listed Corporation management experience far behind the developed countries. Therefore, compared with the developed countries, Chinese securities market may have some new characteristics. As for the research in this field, the most scholars focus on the research of the main board market. But in our country, small and medium-sized market is more favored by investors because the capital of this market is small and is being supported by government, high technology, development potential. At the same time, the small and medium-sized market listed Corporations are more urgent to need financing than the main board market listed Corporations. Therefore, compared to the main board market, the small and medium-sized market listed Corporation is worthy of exploring.This paper consists of six parts:The first part is the introduction, introduces the research background and research significance of signaling effect. In Chinese securities market, the stock price of small and medium-sized listed Corporation is low because of the small scale. Then the paper reviews the relevant research results about the signaling effect of dividend policy at home and abroad, laid the theoretical foundation for the empirical study. Finally, introduced the research purpose, research approach and summarizes the research contents and methods.The second part, mainly explains the basic concepts related to the dividend distribution policy. The statement of the theory is based on dividend distribution policy, including the dividend irrelevance theory, signal transmission theory, different income tax theory, agency theory. Dividend irrelevance theory argues that there is no effect of dividend policy on the market value of listed Corporation; The signal transmission theory argues that information can be used to transfer the companies’business information; The different income tax theory argues that investors may adjust the investment policy to maximize their benefits; Agency theory argues that the operators of listed corporations want to maximize their own interests through the dividend policy. And then, this chapter defines the basic concept of dividend, dividend policy, small and medium-sized board etc. Finally, this chapter introduces several kinds of dividend distribution, including residual dividend, fixed or stable growth dividend, low normal and extra dividend.The third part, introduces several kinds of listed Corporation dividend, cash dividend, stock dividend, converted into capital, stock buybacks. Cash dividend is one of the most common dividends; stock dividend is to give shares to shareholders; converted into capital is to convert the capital reserve into equity, it increases the company’s equity scale; stock buyback is that the listed Corporation buy the stock back from the stock market. And the chapter states the current situation of listed Corporation and explore the factors.The fourth part, use the cumulative excess return method to analyze the effect of the signal transmission to stock price. First, summarized the characters of the overall samples of small and medium-sized stock market, and then do research on different dividend distribution modes and different industries to analyze signal transmission to stock price. Most of investors accept "cash and stock dividend" and don’t like "cash dividend". At the same time, the signal transmission of estate and business is the most effective and ineffective. At last, this chapter used T test to confirm the conclusions above.The fifth part, use the multivariate linear regression model to study on the signal effect of small and medium-sized stock market listed Corporations’dividend policy. The results show that, there is a strong signal effect to the current operating performance, but there is no signal effect to future performance.The sixth part, summarizes the results of empirical analysis and give the advices to investors, listed corporations’management, the government.