Research On Dividend Distribution Policy And Dividend Announcement Effect Of The Listed Companies In China

Dividend Distribution policy is an important content in listed company’sfinancial management, and as the company’s there major policies with financingdecisions and investment decisions. Dividend distribution also is an after-tax profitsdistribution of listed company, not only to be bound up with listed company’slong-tern development, but also investors’ current earnings. And more and morepeople pay attention to the policy. Many scholars have been trying to make researchon dividend distribution behavior from different perspectives for a long time.However, these studies have not given consistent and convincing conclusion so far.Taking into account the institutional context of China’s listed companies, the paperstudy the difference between before and after of non-tradable shares reform by pull-indummy variables, and discuss market reaction to dividend announcements based onsignaling theory.The paper adopts the sample from all listed A-shares firms in China over theperiod of2001to2012,and deeply study their dividend distribution behavioralcombined with relevant dividend distribution theory and behavioral finance. First, thearticle use Logistic regression model to explore these factors that influence dividenddistribution propensity of listed companies, then use multiple liner regression modelto examine the impact factor of listed companies’ cash dividend distribution levelexcept the data that listed firms don’t have cash dividend. Last, the paper applies anEvent Study in order to investigate the announcement effect of cash dividend changesand to examine simultaneously if the dividend signaling hypothesis holds in China’sstock market. Empirical results find that these factors of listed companies’ dividenddistribution propensity are different with these factors of dividend distribution level inChina, and these factors have some difference along with the time; these significancefactors that influence dividend distribution propensity are dividend policy continuityand earning per share; non-tradable shares reform cut down dividend distributionlevel of listed companies in our country; the announcement effect of cash dividendchanges has a negative influence on share prices and stock market, and such resultssupport the dividend signaling hypothesis, and we also find that there is no significantdifference between the cash dividend increase and decrease announcements effect.The paper put forward some recommendation：（1）Continuing to deepen non-tradableshares reform, optimize stock rights structure and improve corporate governance mechanism;(2) Strengthen the capital market management, gradually standardizeinstitutional arrangements of the listed companies’ dividend distribution policy;(3)Strictly supervise information disclosure of listed companies, increase monitoringefforts to stock market, and explore the institutional arrangements to prevent insidertrading.