Study On Cash Dividends And Investment Efficiency

In China,the stock market has the characteristics of paying attention to the financing but ignoring distribution.In recent years,the China Securities Regulatory Commission has issued a series of regulations to regulate the dividend of listed companies,but the continuity and stability of cash dividend distribution of listed companies need to be improved.Under the background of the rapid development of the macroeconomic environment,the non-efficient investment behavior of listed companies in our country generally exists,which greatly damages the overall value of listed companies.There is a general situation of overinvestment or underinvestment in listed companies,which is not conducive to enhancing the overall value of listed companies.At the same time,the cash dividend policy of listed companies has become an important means to restrain the behavior of inefficient investment.The relationship between cash dividend and investment efficiency is based on the analysis of agency theory,information asymmetry theory and free cash flow hypothesis.On the basis of the selection of cash dividend payment index in two cities in China from 2012 to 2016,using Richardson model to measure the listed company investment efficiency and using the tendency of cash dividend payment and the strength of cash dividend distribution as two indexes of the measurement of cash dividends.The empirical evidence proves the existenc-e of non-efficient investment in the listed companies and the relationship between cash dividend and investment efficiency.The following conclusions are got:firstly,there are excessive and insufficient investment in listed companies in China,and the problem of inefficient investment in listed companies mainly reflects the problem of insufficient investment;secondly,when free cash flow is rich,the level of free cash flow of listed companies is positively related to the level of excessive investment,when free cash flow is short,the level of free cash flow of listed companies is negatively correlated with the degree of insufficient investment;thirdly,in the listed companies with rich free cash flow,issuing cash dividends can restrain overinvestment and increase cash dividend distribution can make the degree of overinvestment better;finally,for the under-invested and free cash flow shortage of listed companies,the distribution of cash dividends is difficult to alleviate the lack of investment,increased cash dividend payment instead promote the degree of underinvestmentThe contribution of this paper lies in the selection of measuring the strength of cash dividend of listed company,cash dividend yield is chosen to measure it,which is from the angle of investor protection.Besides,the market value is included in the measurement of cash dividend,which helps to compare the dividend distribution of listed companies in the stock market,in order to provide stronger support for the non-efficiency investment of listed companies by cash dividends.