Analysis Of China's Listing Corporations' Cash Dividend Policy

Enterprise's financial management activities include fund raising,using and allocation,known as the three company's financial activities——the financing decision,investment decision,dividend policy,among them the dividend policy has important influence to the company whether it can achieve the financial management goal of maximizing the wealth of shareholders.In addition,the company's dividend policy is one of the important factors that investors will consider when they make investment decisions;different dividend policy will bring investors different return on investment.At the same time,if listing Corporations can formulate reasonable dividend policy to return shareholders,this will be beneficial to enhance the capital market's attraction to investors,to cultivating investors' value investment,long-term investment,the rational investment philosophy,then it can promote the healthy development of capital market.Corporate governance is a set of "institutional arrangement" that aims to encourage managers' behavior consistent with the company's various stakeholders' interests' target,including the independent director system,share evaluation and compensation system,financial disclosure system and shareholder representative litigation system.The structure of corporate governance is how the company's rights distribute between shareholders,directors and general manager,etc.Corporate governance involves the shareholders of listed companies,the board of directors,management,creditors,suppliers,employees and the government,and many other stakeholders.Good corporate governance structure can coordinate the interests between all stakeholders through various corporate governance mechanisms,so that the interests of many stakeholders can achieve a dynamic balance.The separation of corporate ownership and management rights,the result of the existence of information asymmetry problem produce the principal-agent cost,and the essence of corporate governance is to solve how to reduce the entrusted agency cost between shareholders and management problems,the improvement of the corporate governance mechanism can effectively alleviate the entrusted agency cost problem.A number of abroad studies show that cash dividend policy can help reduce agency cost,reduce free cash flow that the management can use to seek personal gain,and reduce the probability of large shareholders encroach on minority shareholders interests.So,the cash dividend policy of listed companies is not only the company's financial problems,but also the company governance issues,it is the gaming result of the various stakeholders of listed company.In order to promote China's securities market develop sustained and healthily,in recent years related supervision department introduced several regulations on dividend policy in particular cash dividend policy of listed companies,supervision department encourage the listed company to pay cash dividend in return for shareholders more and more,and requires the cash dividend policy of listed companies have continuity and stability,therefore,China's domestic scholars pay close attention to the cash dividend policy of listed companies.This paper firstly combed the review of the literatures on the dividend policy at home and abroad,explains the relevant theories of cash dividend policy,and then uses descriptive statistics analysis method to analyze the present situation of cash dividend policy of the Shanghai and Shenzhen two stock markets' A-share listed companies in our country.Because of the existing literatures are less about the research of the contrast differences of corporate governance between for many years in a row did cash dividend distribution and for many years never did cash dividend distribution of listed companies,so this article in the analysis on the present situation of cash dividend policy of listed companies in our country,further screening listed companies which for 11 consecutive years from 2003 to 2013 did the cash dividend distribution as research samples,and choose matching samples from the listed companies which for 11 consecutive years from 2003 to 2013 has never been did the cash dividend distribution,collect these listed companies related corporate governance indexes for 11 consecutive years through CSMAR database,finally,use the empirical research method of the paired samples T test to inspect data.On the basis of descriptive statistics analysis and empirical research,this paper draws the following conclusion:in recent years,cash dividend policy has become the dominant form of the return way for shareholders of listed companies in our country,but the number of not assigned listed companies is still larger,few take the phenomenon of semi-annual dividend,cash dividend policy lacks continuity and stability,and refinancing needs has influence on cash dividend policy of listed company;In addition,with different cash dividend policy of listed company,the ownership concentration,board independence,executive compensation has significant differences,level of managerial share ownership failed to pass the test of significance.On the basis of descriptive statistical analysis and empirical research's conclusions,this paper puts forward some corresponding policy recommendations.