Geographic Location And Cash Dividend

Since the "mystery of dividend" was put forward,dividend policy has been widely concerned by the academic community.From the theory of dividend independence,agency cost,signaling theory to the theory of dividend catering which combines modern and behavioral finance,this paper expounds the motivation of dividend distribution from different perspectives,so that the dividend policy can be continuously developed and improved.In addition,some scholars,starting from the internal and external environment of the company,analyze the internal factors such as the ownership structure,life cycle,growth of the company,and the impact of external macro policies,economic conditions,financing problems and other market characteristics on dividend payment.These findings enrich the research of dividend policy,and elaborate various influencing factors of dividend policy.In addition,with the introduction of semi compulsory dividend policy,domestic scholars have discussed the effectiveness of the policy.Most studies believe that the semi compulsory dividend policy can effectively promote the listed companies to pay more cash dividends,especially for some companies that do not meet the regulatory requirements to pay more cash dividends,but there are some bad phenomena such as "threshold effect" and shareholders' tunneling behavior.Therefore,how to protect the interests of small and medium-sized investors more effectively and how to increase the dividend intensity of companies that meet the dividend conditions become an important problem to be solved urgently.With the rise of economic geography,a large number of scholars have found that financial geography plays an important role in the capital market.As an agent variable of information asymmetry,regional factors affect corporate governance,bank deposit and loan pricing,individual investment decision-making and other activities.Some studies also found that local investors have lower cost of obtaining information from local companies and are closer to institutional investors,which results in geographical preference.However,there are few literatures about the difference of regional distribution of dividend policy.Therefore,this paper discusses the influence of regional factors on dividend policy,and analyzes the influence channels of regional factors to make up for the shortcomings of existing research.And from the empiricalconclusions,we can draw reasonable suggestions to promote the good cycle of capital market and protect the vital interests of investors.In the study of the influence of geographical factors on the dividend policy of listed companies,this paper first divides geographical factors into two kinds of proxy variables: location and distance.In the division of the center and remote areas,we take Beijing,Shanghai,Shenzhen,Guangzhou and other top 17 cities as the center cities in combination with the competitiveness ranking of Chinese cities as one of the achievements of cross-strait social science cooperation in 2011.If the company's registered place is located in one of these 17 cities,it is the center area,otherwise it is the remote area.At the same time,the shortest distance between each company's location and the 17 th Central City is set as the distance variable.Through regression analysis,it is found that the dividend payment level of the company in the central area is higher than that in the remote area,and the farther away from the center,the lower the dividend payment level.Secondly,we explore two potential information channels.The first is to join analysts to focus on the source of geographical effects.As an information intermediary,analysts can reduce the asymmetry of internal and external information and improve investors' awareness of the company by virtue of the advantages of collecting,processing and disseminating information.We find that the increase of analysts' attention weakens the impact of geographical location on cash dividends.The other is to introduce the exogenous event of high-speed rail opening,the opening of high-speed rail has compressed the space distance,improved the speed of personnel flow,and promoted the exchange and dissemination of information in various regions.We find that the opening of high-speed rail enhances the transparency of information and reduces the impact of geographical location on dividend payment.Thirdly,we further explore the influence of company characteristics and external environment differences on geographical effects.Considering that there are significant differences in the internal characteristics of the company,such as the concentration of equity and the nature of the enterprise,the enterprises with high concentration of equity tend to reduce the distribution of cash dividends more than those with low concentration of equity.At the same time,compared withnon-state-owned enterprises,state-owned enterprises actively cooperate with the existing dividend policy to pay more dividends.On the other hand,the external environment restricts the dividend payment of the company.The higher the level of regional economic development,the reduction of financing factors can promote the dividend payment,and the tax difference will make the company carefully weigh the dividend payment.We find that the lower the ownership concentration,the marketization process and the tax level,the greater the impact of geographical location on cash dividends.In addition,considering the self selection of the company's geographical location,we have passed the endogenous test of instrumental variable method and propensity score matching method,which is still significant.Finally,we redefine the main variables,divide the sample regression,add the financial crisis factors and other robustness tests,and verify the reliability of the conclusion again.At the same time,we also find that companies with higher financial leverage are more reluctant to pay cash dividends,and companies in the center are more willing to adopt flexible dividend policies than those in the remote areas.These research results have certain reference and inspiration significance.Relevant regulatory departments need to adapt to local conditions,combine the company characteristics and regional environment differences,diversified,refined cash dividend requirements and relevant regulatory measures.