The Effects Of Supplier/Customer Concentration On Cash Dividends Of Listed Manufacturing Companies In China

Since Miller and Modigliani(1961) pioneringly proposed“dividend Wu Guan Lun”, dividend policy has always been concerned and researched by scholars both at home and abroad. Dividend policy、investment and financing decisions are called the three major financial decisions. dividend policy is related to enterprises、investors、creditors and other stakeholders interests based on the current income. If the enterprise distribute more cash dividend to outside, it is not conducive to enterprise management and development, otherwise it deviates from the shareholders willingness, resulting in the company’s tarnished image in the capital markets. therefore, reasonable dividend policy is of great significance for corporate governance. the enterprises are not willing to distribute cash dividend in a long term, although the government promulgated provisions relating to the dividend policy to improve the status quo, but the effect is not good(chang-qing li, zhi-hua wei, shi-nong wu, 2010). So, the scholars have always been the focus on what factors influences the dividend policy of listed companies, existing literature mainly focused on the company character 、 corporate governance which influences on dividend policy of listed companies.Suppliers and customers are important stakeholders for enterprise, thus, they play a important influence on the many aspects of business such as operations、strategies(Freeman, 1984), stable upstream and downstream relationships can help companies create more excess profits, thereby helping companies maximize value, therefore, companies will have the motivation to maintain such a relationship(Dyer, Singh, 1998), and this relationship between the upstream and downstream is an important strategic resource for enterprise, which has become increasingly prominent. at present, enterprises should strengthen the management of supplier or customer relations in order to hold the normal operation of enterprises and improve the competitive ability in the case of products market with excess capacity. Although researchers begin to pay close attention to study non-financial stakeholders(suppliers and customers) how to impact on the governance of listed companies, but it is still lacking about the non-financial stakeholders’(suppliers and customers) impact on the dividend policy of listed companies. Therefore, this article chose 2007-2013 among all the A-share listed manufacturing companies in Shanghai and Shen zhen Stock Exchanges as the study sample, combine with China’s special institutional environment, build specific model to study the impact of customer and supplier concentration to cash dividends of listed companies base on implicit contract and other related transaction cost economics theory. Studies shows that: there was a significant negative correlation between the degree of customer concentration and the listed company’s cash dividend; comparing to non-state-owned enterprises, the weak negative correlation between the concentration of state-owned enterprise customers and suppliers with the company’s cash dividend. Comparing to companies in the poor financial environment region, the weak negative correlation between the concentratin of state-owned enterprise customers and suppliers with the company’s cash dividend in the better financial environment region.This article research the customer and supplier concentration(non-financial stakeholders) how to influence cash dividends of listed companies from a new perspective to enrich the empirical evidence of the impact factor of the dividend policy and promote the cash dividend policy research in transition economies.The empirical study found that non-financial interests of the company’s stakeholders-customers will have a significant impact on the level of cash dividends of listed companies, so the prevention of large customers’ financial crisis is an important factor in making the listed company’s cash dividend policy, also, we can not ignore regional differences in the financial environment which affects the level of payment of cash dividends of listed companies.