The Inner Factors On Non-Distribution Diviend Policy Of China's Listed Companies

As one of the three core areas on corporate finance, Dividend policy has been concerned by theoretical and practical scholars in western financial circles. Compared with the Western Dividend theory and practice, there are some common characteristics in Dividend Policy of the listed companies in China: a smaller number of companies that pay Cash Dividend; a low level of cash distribution; widespread of non-distribution of listed companies; a narrow mind of listed companies on Dividend Distribution, which lacks of continuity and stability in dividend policy.As an extreme example of dividend policy, non-distribution dividend policy has already attracted attention by the scholars all around the worid. Against this background, the paper is to discuss the internal factors that influence the listed companies to adopt non-dividend policy. And the paper is to analyze the phenomenon of "the profitable listed companies but non-dividend-distribution", so as to make up the shortfall of previous studies' content and methods. Meanwhile, this paper provides a reference for the management of listed companies to establish dividend policy, and for the investors to make investment decisions; it also put forward feasible suggestions to regulate China's dividend policy market, and provide the basis to regulate listed companies' distribution activities for the supervise departments.Firstly, the paper reviews the Western dividend policy theories, summarizes the research results on China's Dividend Policy, and give revelation for this paper from the formerly researches. And then using modern business theory and Dividend Policy theory, analysis the internal factors that impact China's listed companies to carry out a non-distribution dividend policy, and put forward reasonable assumptions. Then give a general description on the financial characteristics of the no dividend distribution companies. And finally, test the assumptions by logit regression analysis. The test results indicate that the main internal factors affect the listed companies adopting non-distribution dividend policy is: profit performance, liabilities status, cash holdings, size of asset and distribution or not for the previous year, the most important internal factor is performance. The main conclusions in this paper that are different with some of the previous theories and research findings are: The empirical result shows that Dividend Policy of China's listed companies have a continuity, this year's dividend policy is influenced by the previous year's, this also reflects to some extent the dividends of listed companies in China already have a certain level of information; Dividend policy is not based on the company's future development needs, is not consistent with the concept of maximizing corporate value. there are companies having less future develop opportunity but still not pay dividends, their funds stay in business and are likely to waste; the quality of assets is not the important factors that determines Dividend forms; there are no significantly positive correlation between non-distribution and liquidity ratio, in some years, even negative correlation between the two.Finally, the paper aims at the fundamental issues of dividend policy formulation in China's listed companies, according to the empirical results of this study, make recommendations for the securities regulatory departments, management of the listed companies and investors.