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An Empirical Study On The Effect Of Cash Dividend Signal Transmission On A - Share Listed Companies

Posted on:2014-02-20Degree:MasterType:Thesis
Country:ChinaCandidate:L X QianFull Text:PDF
GTID:2279330434470829Subject:Business Administration
Abstract/Summary:PDF Full Text Request
Comparing to Western capital market, Chinese one has a shorter history, less mature regulatory mechanisms, less progressed governance structure of listed companies. Thus, a lot of unique phenomenon showed up in the listed company’s dividend signaling process. This article selected dividend policy as the subject, trying to start from signaling theory research. Unlike the previous literatures, this article introduced a two-step test by using both event study and regression models. I tried to analyze A-share listed company dividend policy’s effect on the stock price volatility and future operating performance by illustrating relevant theories and models.In the first part of this article we described the significance of the topic; The second one saw the origin of signaling theory as well as theoretical and empirical researches both domestic and abroad; In part three we did descriptive statistics and a comprehensive analysis on dividend policy of listed companies in China A share for2007-2012; Event study and regression models were used in part four to test dividends signaling’s impact on stock price volatility and on future operating performance, respectively. Finally, we draw some conclusions, and to clarify the limitations of the study.The main conclusions of the study were that during2007and2012, proportion of listed companies that paid dividend is rising. Companies that announced a dividend increase/decrease will see fluctuations in the same direction of the stock price, but a small proportion,1.14%and-1.21%respectively. Excess earning of the first-time paying group is more obvious; changes in listed company dividends include changes in future earnings of next year. A significant positive correlation was found between dividends’changing rate and the company’s net profit change in the coming year. Further, dividends reduce passed a stronger signal than increase, which better predicted the company’s profitability in the coming year.
Keywords/Search Tags:cash dividends, signaling theory, event study, regression analysis
PDF Full Text Request
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