Financing Constraints,Equity Incentives And Cash Dividend Stability

Dividend policy is one of the three core contents of modern corporate financial management activities.On the one hand,it is the logical continuation of the company's fundraising and investment activities,and it is the inevitable result of its financial management behavior;on the other hand,the appropriate dividend distribution policy can enable the company to obtain long-term development conditions and opportunities.According to the "dividend rigidity" theory,the company's dividend policy should be stable and continuous.Therefore,the implementation of a stable dividend policy can convey a good message to investors and the market,which is conducive to the steady development of the capital market.Based on this,the theoretical and practical circles have explored the factors affecting the stability of cash dividends.In general,the main factors that influence the stability of dividends are profitability,agency conflict and information asymmetry(Leary & Michaely,2011).On the one hand,in the case of asymmetric information inside and outside the company,external investors will be more cautious in investing with less company information than internal managers,which will cause difficulties in external financing of the company and is an external factor.On the other hand,in corporate governance,management is the direct person in charge of the company's profitability,and there are agency conflicts and information asymmetry between shareholders,managers may be willing to enjoy,over-investment for self-interest reasons,and As an internal adjustment factor,equity incentives can greatly alleviate such conflicts and reduce agency costs,which are internal factors.Therefore,this paper explores the factors affecting the smoothness of cash dividends from equity incentives and financing constraints – both internal and external.Firstly,observe the smoothness of cash dividend distribution from 2008 to 2017 as the time window.Secondly,take all the A-share listed companies in China from 2011 to 2015 as the research object,and use the manual collection of corporate financing constraints(internal financing,commercial credit).Financing,bank financing),equity incentive data,using multiple linear regression to study the relationship between corporate financing constraints and dividend stability;and then using multiple linear regression to study whether equity incentives will affect the above results.The study finds that the greater the financing constraints faced by enterprises,the worse the cash stability of the company;and the equity incentives can alleviate the impact of financing constraints on the stability of cash dividends to a certain extent.In this paper,while studying the stability of cash dividends,from the perspective of equity incentives,this paper explores its impact on financing constraints and cash dividend stability,and further subdivides the three types of equity incentives.It has deepened the research field of cash dividends,and also provided suggestions for the smooth distribution of future cash dividends and the stable development of the capital market.