Comparative Study Of Cash Dividend For Stock Market Of China And Foreign Countries

Stock market is an important engine of economic growth, in which savings of the market investors converts into operating cost of corporation and investors gain dividends and capital gains from corporation. This paper does a systematical analysis of the situation of dividend distribution for listed companies in China and foreign countries by using the three indicators in measuring dividend level: dividend rate, proportion of corporations that pay dividends and dividend yield. From 2005, based on establishing longer and steady dividend policy, regulators implement the policy of mandatory dividend, and this concept is gradually accepted by the market participants.Firstly, the gap between Chinese stock markets and overseas markets is small in respect of dividend rate and proportion of corporations that pay dividends, while the dividend yield is significantly lower than that in overseas markets.Secondly, the dividend level in Chinese stock markets is significantly lower than that in overseas markets, and the stability and continuity of dividend policy is also lower than that in overseas market. But the number and proportion of corporations that pay dividends has been increasing step by step.Finally,the paper divide the sample period to two parts to compare different payment method of dividend policy affecting market. And some discoveries are found in this paper. One is in period of before 2005, calculated abnormal returns of the companies who are stock dividend are significantly superior than other payment methods. Moreover, in the previous period, abnormal volumes of the companies who are stock dividend are high-variability, however, in the next period, this phenomenon reverses.In consequence, the dividend supervision in Chinese stock market should focus on the structural problem that is to pay close attention to the dividend problems of the corporations with weak growth and low dividend level, and the overvalued stocks, which reduce the dividend return and ultimately affect the investors' reasonable level of return.