Financial Development And Cash Divedend Policy Of Listed Company In China

Dividend policy plays an important role in reducing the agency cost,improving the level of corporate governance and protecting the normal returns.But for a long time,in order to reverse the listed company "re financing,light returns",protect the legitimate income of investors,CSRC(China Securities Regulatory Commission)has repeatedly issued policies,in the form of "guidance" and "semi coercive",to require listed companies to distribute cash dividends.However,the "Regulatory paradox" emerged in the course of policy implementation has attracted more and more academic attention.Actually,corporate governance environment is more basic than corporate governance mechanism.Finance is the core of modern economy,and the important cornerstone of the existence and development of financial entities,and its development will also have an impact on enterprise behavior.Financial development helps to ease the financing constrains of enterprises and enhance the transparency of the market information,which makes it an important proxy variable of corporate governance environment.By this token,whether it can be a more market-oriented means to improve the level of financial development,in order to have a positive impact on the cash dividend policy of listed companies?Based on above questions,this paper combines the financial development with the cash dividend policy of Listed Companies in China,And combined the different levels of financial development with the listed company's life cycle,the nature of ownership,the company's financial characteristics(growth,financing constraints,free cash flow)and other factors,Comprehensive exploration how the financial development affects the cash dividend policy of the listed companies.In addition,this paper further explores the impact of financial development on the cash dividend policy of Listed Companies in the context of the financial crisis in 2008.Overall,this study found that the following four points:Firstly,there is a positive correlation between financial development and cash dividend policy;after consider the enterprise life cycle factors included in the study,we found that the more mature companies tend to pay more cash dividends and this relationship become more significant when the listed companies in the area with high level financial development;Further research shows that financial development also has an impact on the probability of the initial payment of cash dividends,the initial payment of cash dividends of mature enterprise is earlier in areas with higher financial development,This shows that the improvement of the financial development level can make the mature enterprises pay the cash dividend earlier;Secondly,considering the financial characteristics(Financing Constraints,Growth and Free Cash Flow)of Listed Companies in China,study the corelation of financial development and cash dividend policy.The study found: there is negative relationship between financing constraints(growth)and cash dividend policy,the higher the degree of financing constraint(growth),the lower of cash dividend payout of companies,but the financial development can significantly alleviate the negative correlation between corporate financing constraints(growth)and cash dividend policy;the more adequate free cash flow of company,the more willing to implement the positive cash dividend policy,but with the outside of the level of financial development,the relationship between free cash flow and cash dividend policy will be significantly weakened.Thirdly,combined with local government tunneling behavior,investigate the relationship between financial development and cash divedend policy of listed companyes with defferent nature of property right.The study found that in order to alleviate the financial pressure of the local government,the local government has more power to carry out tunneling behavior which through the way of related party transactions to reduce the cash dividend payment of state-owned listed companies;financial development to promote a more market-oriented banking system which reduce the advantages of state-owned enterprises to obtain credit support from bank,in order to save money and improve the efficiency of the use of free cash flow,the state-owned enterprises will reduce the payment of cash dividends.Finanly,the financial crisis in 2008 had an important effect on the cash dividend policy of listed companies: In the financial crisis,China's enterprises generally have the phenomenon of financing constraints,so the crisis will have a negative impact on the cash dividend policy of listed companies;Due to the relative lack of government support,during the crisis,the non-state-owned enterprises have significant disadvantages in obtaining government funds and policy support,In order to prevent the occurrence of uncertain events,non-state-owned enterprises are more willing to retain more capital reserves,take the negative cash dividend policy;although the listed companies in the financial crisis generally take a negative cash dividend policy,to enhance the level of financial development can weaken this negative correlation.