A Study On The Impact Of Cash Dividend Distribution On Earnings Persistence Under The Semi-mandatory Dividend Policy

Dividend policy is an important financial decision for listed companies.The cash dividend distribution is the core of the company's profit distribution,and it has an important relationship with the company's earnings quality.In recent years,the theory of dividend signaling has received great attention from the academic community.In Europe and America developed capital markets,the signal transmission theory has acquired fruitful research results.However,academic community has not yet reached a conclusion in our country as to whether cash dividends can convey the company's future earnings information.The unanimous conclusion comes from the fact that China's capital market started relatively late and its development is relatively slow.The dividend distribution policy is not standardized..As an important measure of earnings quality,earnings persistence plays a role of allocating resources in China's capital market,it has attracted much attention in recent years.In order to regulate the dividend distribution behavior of listed companies better,the securities regulatory department has issued a series of semi-mandatory dividend policies in recent years.By linking the level of cash dividends with the threshold for refinancing,it urges the dividends of listed companies to be distributed and rewards investors.Under the impact of this policy,in order to meet the threshold for refinancing,the effect of the distribution of cash dividends of listed companies on earnings persistence is an area that can be studied in depth.This article takes the semi-mandatory dividend policy as the entry point,selects the samples of Shanghai and Shenzhen A-share listed companies from 2007 to 2015,and based on signal transmission theory and carries out a theoretical analysis and empirical test on the relationship between cash dividend distribution and earnings persistence.Secondly,in the empirical analysis,this article uses the relevant indicators to divide the sample companies into refinancing demand groups and non-refinancing demand company groups.Then compare the sample companies' data of these two groups,and study how the company's cash dividend distribution with refinancing demand will affect earnings persistence compared with companies without refinancing demand.Through research,the following conclusions have been drawn:(1)Under the semi-mandatory dividend policy,companies that distribute cash dividends have stronger earnings persistence than undelivered companies.(2)Under the semi-mandatory dividend policy,companies with high cash dividend payout rates have higher earnings persistence than those with low payout rates.(3)Under the semi-mandatory dividend policy,compared with companies without refinancing demand,the positive effect of the cash dividend distribution of companies with refinancing demand on earnings persistence will be weakened.The innovation of this article lies in the semi-mandatory dividend policy as a starting point to study the effect of cash dividend distribution on the earnings persistence under the regulatory policy,and put the semi-mandatory dividend policy,cash dividend distribution,refinancing demand,and earnings persistence into the same framework for analysis to explore the effect of the semi-mandatory dividend distribution policy.It is hoped that the regulatory authority will be provided with a scientific monitoring policy and provide investors with more scientific investment guidance,it has practical significance in promoting the long-term stable development of the securities market in China.