Empirical Evidence Of How Differentiated Cash Dividend Policy Impacting On Cash Dividend Behaviors Of Listed Firms

Since 1990 s,under the background of immature supervision policy of Listed Companies in China,listed companies with low dividend distribution rate or even without dividend distribution have occupied the vast majority of the market,which also makes relevant regulatory departments such as the SFC begin to pay attention to this problem and seek out solutions.Thus,in the past ten years from 2004 to 2013,the regulatory authorities have issued a series of semi-mandatory dividend policies in order to improve the dividend distribution of listed companies.Although this package of policies has improved the dividend distribution level of listed companies to a certain extent,it still has the limitation of "one size fits all",leading to some maturity.Although listed companies with stable period and profitability are still not dividend-paying under regulatory pressure,the effect of previous regulatory policies on such enterprises is not obvious.In response to this situation,on November 30,2013,the Securities Regulatory Commission promulgated "Guidelines for the Supervision of Listed Companies No.3-Cash Dividend of Listed Companies"(hereinafter referred to as "Differentiated Cash Dividend Policy"),clearly specifying the minimum dividend distribution ratio of listed companies at different stages of development and with or without major investment arrangements.China's dividend distribution supervision policy has changed from non-substantive binding to limiting the minimum dividend proportion according to industry and future investment demand.Now,after the implementation of this policy,does the willingness and level of dividend distribution of listed companies improve,and does it really play a role in linking dividend policy with enterprise growth and investment demand? The purpose of this study is to explore the impact of the policy on the dividend distribution of listed companies through descriptive statistical analysis,correlation analysis and binary discrete choice model.The empirical results show that:(1)After the promulgation of the policy,the differentiated cash dividend regulation policy effectively improves the dividend distribution willingness and dividend distribution level of listed companies.(2)differentiated cash dividend policy can raise the sensitivity between cash dividends and company growth.After the promulgation of differentiated policy,the negative correlation between corporate growth and cash dividend distribution is significantly enhanced.(3)Differentiated cash dividend policy can improve the sensitivity between cash dividend and the company's future investment demand.By investigating the impact of the company's future investment demand on cash dividend distribution,the results show that there is a negative correlation between capital expenditure and cash dividend distribution.The main contributions of this paper are as follows: Firstly,this paper makes an in-depth study of the impact of the differential dividend policy on the cash dividend policy of Listed Companies in China at the macro,meso and micro levels,which is helpful for a more comprehensive and in-depth understanding of the role and implementation effect of the differential dividend policy.Secondly,after the promulgation of the differential dividend policy,the relationship between the growth of the company,the future investment demand and the cash dividend distribution has been studied deeply,which fills the gap of the theory circle on the differential dividend policy.Thirdly,the empirical evidence provided in this paper has important reference significance for the construction of appropriate dividend-related regulatory policies and regulations.The innovative points of the study are:(1)This paper quantifies the concepts of "growth" and "major capital expenditure arrangement" mentioned in the dividend-sharing guidelines in a multi-dimensional way,which provides a basis for quantifying the implementation effect of the new policy of cash dividend supervision;(2)By comparing the cash dividend distribution and growth of enterprises before and after the implementation of the new policy of cash dividend supervision;The sensitivity change between investment expenditure in the next year reveals how government regulation affects dividend-sharing decisions of enterprises,and verifies the life cycle theory and free cash volume hypothesis from a dynamic perspective.