Enterprise Life Cycle,CEO Power,and Cash Dividend Policy

Undoubtly,dividend policy plays an important role in the enterprise management decision,closely related to the interests of enterprises,investors and other parties,and the enterprise's survival and development.Dividend policy is the result of the trade-off between current shareholders' interests and enterprise future development,which would cause the stock of capital and shareholders' equity scale of the enterprise and the change of the structure,at the same time,as a logical continuation of financing and investment decisions,would also influence the enterprise internal financing activities and investing activities.To a certain extent,corporate cash dividend is the result of management and shareholders game equilibrium.Since the implementation of decentralization in China reform,the whole enterprise reform process is essentially the process of formation and improvement of management power.Derived from both inside and outside of system transformation and weakening of governance,the "insider control" problem may lead to CEO power beyond the corporate governance mechanism,and the CEO have absolute influence over the board of directors and controlling shareholders in corporate financial decisions.Establishing personal kingdom,and the pursuit of continuous investment expansion is one of the important behavior characteristics,CEO tends to have the effect on the cash dividend policy to control the enterprise's cash flow,which would maximize its interests;on the other hand,with the development of Chinese capital market,enterprise life cycle characteristics of growth and development is more and more obvious,which will be accompanied by the formation of the cash dividend policy life cycle characteristics,at the same time in the process of mature,the enterprise will be accompanied by the CEO continuous increase of human capital value,resulting in the CEO's power been constantly strengthened,in order to obtain more power gains,the effect of its life cycle characteristics on cash dividend inevitably.Currently,the domestic and foreign scholars have explored the influence factors of cash dividends of listed companies from various angles,and the existing research has achieved some results,but some of the research conclusion are still controversial,and mostly based on the company characteristics,such as company size,growth opportunity,profitability and shareholder's stake,but the above conclusion still cannot fully explain the particularity and complexity of cash dividend policy in our country,the mysteries of the "Chinese dividend puzzle" is still not solved.In addition,most of domestic scholars ignored that the power of the management is an important factor for cash dividend policy,fewer explore the topic about the effect of the CEO on cash dividend.When come to CEO power,involving more is the effectiveness of the compensation performance research.Jensen(1986)has pointed out,the company management conflict with the interests of the shareholders is embodied in the choice of dividend policy,and Chinese securities capital market supervision mechanism still has many problems,such as agency problem,which leads to CEO plays an decisive role in decision-making,centralized phenomenon exists in the listed companies in our country.How to protect the interests and demands of small and medium-sized investors is still our focus.Considering the theme of study,this paper is divided into six parts:Chapter I is introduction,which introduces the background and research value of the paper,raise research ideas and methods,and outlines the technology roadmap in this part.Chapter II is literature review,which includes the influence factors of cash dividend,the speculation behavior produced by CEO power,and put forward the research points of this paper.Chapter III is the theoretical basis and assumptions,which defines the main concepts of this article,including the enterprise life cycle,CEO power,analyzes some basic theories,such as the principal-agent theory,asymmetric information theory,residual control theory,free cash flow hypothesis theory.Then,hypothesis are put forward on the basis of this.Chapter IV is empirical study design.Empirical models and the variables used in them are elaborated in this part according to the research content.Chapter V is the empirical results and analysis,which includes descriptive statistical analysis and regression analysis.Plus,this paper conducted a series of robustness tests in order to verify the robustness of the results.Chapter VI is the conclusion and prospect.In this part,conclusions are made according to the results of regressions and relative policy advices are put forward on the basis of research conclusions.Besides,the innovation points and shortcoming of the study are also pointed at last.This paper finds that enterprise in different life cycle stages,will take different cash dividend payments.Due to the lower growth in mature stage,have accumulated plenty of retained earnings,and relative to the growth and decline have larger cash dividend payments,so the cash dividends of listed companies has the characteristics of life cycle;CEO power could have a significant impact on the cash dividend of the listed companies,in the higher CEO power,listed company tend to pay a lower level of cash dividend;Listed companies in different stages of life cycle,the CEO power significant differences for the effect of cash dividend payments,compared with the stage of growth and decline,in the mature stage of the listed company CEO for the level of cash dividend payment is obvious negative impact;Due to the CEO power for negative effect of cash dividend payments,in the higher power,compared with the smaller CEO power,its life cycle characteristics of cash dividend will be weakened.This paper provides data support for further improve the budget system for state capital.