The Research On The Influence Of Abnormal Cash Dividend On Irrational Investment

investment,financing and dividend distribution are three important parts of financial management.Investment is the starting point of financial decision-making during the process of operation,the creation of the value of the company is dependent on investment decisions.Investment efficiency directly affects the value of the company.In today's Imperfect market conditions,the company to achieve the optimal allocation of resources is obviously unrealistic,it will inevitably produce the efficiency investment issues,namely,excessive investment and inadequate investment.The agency cost and financing constraints are considered as two main reasons relating to inefficiency investment by most scholars at home and abroad.According to the modern financial theory,dividend policy as an important part of enterprise supervision contract,reduce the agency costs and dividend signaling function.Company's dividend distribution policy,therefore,is reasonable or not,will affect the company's investment and financing decision accompanied with the value of the company,and this will in the end affect the macroeconomic.Because the capital market system in our country is not yet perfect,the present dividend policy is different with the western's.Western countries often send messages to the market by issuing cash dividend,in order to achieve the purpose of investment and financing.But in China there is an obvious "Chinese characteristics","miser" and "hollowing out" phenomenon,etc.The western mature theory probably does not apply to China's capital market.At the same time,the current domestic research on relationship between cash dividend and investment efficiency mostly stay in the normal group,the research on the abnormal group with investment efficiency is less.Based on the reasons above,embarking from the abnormal group,this paper test companies' abnormal group effecting on inefficiency investment and free cash effecting on inefficiency investment by the data from 2011 to 2015.The results show that abnormally high cash dividend has significant constraining effect on excessive investment leading to inadequate investment;Abnormal low dividend is related to excessive investment positively,and related to inadequate investment negatively.After considering the influence of the free cash flow,we found that abnormal high dividend can effectively restrain the excessive investment behavior of listed companies lacking of cash flow,but for free cash flow rich company,abnormal high dividend cannot restrain over-investment;Abnormal low dividend has effects on company with rich cash flow but can cause over-investment in companies with rich free cash flow.