| Dividend policy is the classic topic in the field of financial studies. Rwlevance theory and dividend irrelevance theory based on perfect capital market assumptions opened the beginning of dividend researches. Thereafter scholars began to expand dividend irrelevance theory hypotheses. Different theories came into being:tax differential theory, customer effect theory, signaling theory, agency cost theory, life cycle theory, catering theory, etc. In recent years, there has been considerable evolution in corporate social responsibility (CSR) by scholars, and companies have begun approaching CSR as a new strategy for improving their image and gaining competitive advantage; this may increase firm value.In order to completely understand social and economic phenomenon, and make an extension and supplement of mainstream finance studies, this thesis do research on the relationship between corporate social responsibility(CSR) and dividend policy.We introduce the background and situation of cash dividends on the capital market in China, analyzing the relationship between corporate social responsibility and financial behavior, and put forward empirical assumptions.Using a sample of 35,376 US firm-year observations over the period 1998-2013, we examine the empirical association between corporate socialresponsibility (CSR) and dividend policy by investigating their causal, simultaneous, and endogenous effects.we find an positive association between CSR engagement and the level of dividend payout after controlling for various firm characteristics. Based on the simultaneous equation approach, we further find that CSR activities increase dividend payout more than dividend payout increase CSR activities.The analysis of individual components of CSR provides strong support for this main finding:five of the six dimensions used in the analysis are also associated with high dividend payout, namely, corporate governance, community, diversity, employee relations and environment. Furthermore, by analyzing the stability of dividend payout, we find that socially irresponsible firms adjust dividends quicker than socially responsible firms:dividend payout is more stable in high CSR firms than in low CSR firms.Using a sample of 2,014 China firm-year observations over the period 2009-2013, we examine the empirical association between corporate socialresponsibility (CSR) and dividend policy. We find an positive association between CSR engagement and the level of dividend payout after controlling for various firm characteristics.Our findings are robust to alternative assumptions and model specifications, alternative measures of dividend payout, additional control variables and the instrumental variables (IV) approach to address endogeneity and selection bias issues. |
