Political Uncertainty,Cash Dividend Policy And Enterprise Value

Government officials are the representative of regional power.Their change will affect the region's political ecology and aggravate the political uncertainty.When the change of government officials has become a normal event,the special system of political promotion and fiscal decentralization makes the political uncertainty caused by the change of government officials more obvious in China.The current research has confirmed that the political uncertainty caused by the change of government officials will affect the regional macroeconomic growth and the investment behavior of enterprises,but whether it will affect the cash dividend policy of the enterprise is the first problem to be solved.The dividend is an important means for the company to distribute surplus to the shareholders.The proper dividend policy is the core of the financial activities of the company.The company dividend policy should not only ensure investors get rich returns and maintain their investment enthusiasm,but also ensure the company has adequate capital supply.But we should realize the maximization of business value is the primary goal of business development.Therefore,all financial management and business decision should be focused on the goal of maximizing business value.As an important business management decision,the policy of cash dividend distribution also should serve the goal of maximizing business value.This paper uses the secretaries' turnover data of 120 cities in China and the experience data of the companies listed in China's A-share market from 2009 to 2016 to reveal whether the enterprises will adjust the cash dividend policy to deal with the political uncertainty caused by the turnover of government officials.And whether this cash dividend policy's adjustment will affect the value of enterprises.The results show that the political uncertainty caused by the change of government officials does affect the cash dividend policy of the enterprise.When they face the political uncertainty,the enterprise will reduce and even stop the cash dividend.And,compared with state-owned enterprises,this phenomenon is more prominent among the private enterprises.In addition,the results also show that the change of cash dividend policy due to political uncertainty caused by the change of government officials has impact on enterprise value.The conclusion of this paper has important enlightenment to the formulation of government policies,the choice of companies financial behavior,and the investment decision of investors.