The Impact Of Cash Dividends On Stock Price Volatility Of Listed Companies In China

Since its establishment,China's stock market has developed rapidly and has occupied an important position in domestic and foreign capital markets.China's stock market is playing a more and more important role in the national economy.However,compared with the developed capital markets in Europe and America,our country can only be regarded as a new show.Therefore,there have always been various problems in the operation of China's stock market,among which the excessive volatility of stock prices,high speculation and high risks in the stock market have been the focus of researchers' attention,and are also one of the difficult problems faced by enterprises and investors.China's stock market has always been in a state of great ups and downs.Apart from the sharp rise and fall of the stock market from 2007 to 2008,the most recent significant change in stock price was in mid-October 2018.First,U.S.stocks fell sharply.Under this background,the stocks in our two cities also fell one after another.The Shanghai Composite Index fell 4% in one day,but rose rapidly on October 22,with all but 30 stocks falling.After that,it began to fall again.According to statistics,China's overall stock market fell by more than 26% in 2018,and rose again soon after entering 2019.This sharp fluctuation in stock prices leads to instability in the stock market,which directly or indirectly adversely affects the development of enterprises and the returns of investors.The reason for the excessive volatility of China's stock price is from the internal mechanism of stabilizing the stock price.This paper thinks that the domestic enterprises' neglect of dividend payout is one of the important factors that cause the instability of the stock price.When investors cannot get a reasonable and stable return on investment in corporate dividend,they will pay more attention to stock trading and high-frequency trading.This kind of behavior of investors has contributed to the fluctuation of stock prices,and also made the stock market environment more full ofspeculation,risks and instability.Therefore,as one of the important endogenous mechanisms of stock price,cash dividend plays an important role in easing stock price fluctuation and promoting the healthy operation of the securities market.Researchers at home and abroad often use dividend signaling theory to explain the relationship between cash dividends and stock price fluctuations.They believe that whether listed companies pay cash dividends and how much cash dividends they pay transmit the cash flow and profitability of the company to the outside world.Investors will consider this signal when buying and selling stocks,thus affecting stock price fluctuations.For example,when traders in the stock market cannot obtain satisfactory investment returns through dividend distribution of enterprises,they will place their hopes on stock speculation to a large extent,thus aggravating irrational investment behavior of investors,which is manifested in blind conformity and frequent change of hands.Unreasonable behavior of market traders intensifies the volatility of stock prices,and the more unstable the stock prices,the more opportunities for market speculators to seek benefits.The long-term adverse cycle has greatly hindered the healthy development of China's stock market.Therefore,from the perspective of cash dividend,this paper deeply studies the influence of cash dividend on the volatility of stock price,and gives some suggestions on corporate governance,dividend policy and investor education according to the research conclusion.Based on the existing research of scholars,this paper first introduces the correlation between cash dividend and stock price fluctuation in theory.Then it describes the current cash dividend distribution status of listed companies in China,compares the current stock price fluctuations between China and other countries in the world,and makes a more detailed comparative analysis taking the United States as an example.Then,an empirical study is conducted on the impact of cash dividends on stock price volatility of sample listed companies.The contents and methods of the specific research are:(1)descriptive statistical analysis of variables,selection of applicable model by F test,regression of panel data using the model,analysis of regression results and conclusion: the volatility of share price of listed companies with dividends is lower than that of listed companies without dividends.(2)Divide listed companies into groups according to the number of years of continuous dividends,and use one-way ANOVA among groups with different dividend years.This paper studiesthe impact of continuous cash payouts on the volatility of stock returns,and draws the conclusion that the volatility of stock prices of listed companies with continuous cash payouts is smaller.(3)The threshold method is used to classify bull and bear markets,and then descriptive statistical analysis and multiple linear regression are used to study.The analysis and regression results show that the impact of cash dividends paid by listed companies in bear markets on stock price volatility is greater than that in bull markets,and the stock price volatility of listed companies paying cash dividends in bear markets is lower.