Research On The Status Of Dividend Payout Of Chinese Companies Listed On GEM

Dividend policy is a research field which is long and classical; meanwhile, it is still carrying a puzzle with a layer of mysterious yarn by now. Although, dividend policy and dividend distribution are sophisticated issues, however, a number of related researches are continue to inject new vitality in this field. Now it is difficult to use a complete framework to collect dividend policy researches together. The major research direction of Dividend distribution is whether dividend affects the companies’value, why company releases dividends and the influential facts of dividend levels. Owing to dividend distribution is the last step of financial management activities, understanding the mysteries of dividend policy has feedback effects advantages to manage the company. At present our country scholars studies of dividend policy based on the Main Board Market, there is no unified conclusion that can be complete analysis of China’s listed companies of "dividend phenomenon" by now. Because of macroscopic and microcosmic differences that exist on Main-Board Market and Growth Enterprises Market, two markets of the listed company of dividend distribution may also present different patterns. This research is to analysis the dividend distribution of GEM listed company and the reasons of this distribution.In view of the Main-Board Market of the dividend policy for market research is not making an agreement of this research. This means that, in the listed companies of dividend distribution situation analysis could not limited of thinking in a theoretical framework. This paper analysis method are based on actual situation, looking for the explanation causes of this phenomenon, then carry the research feedback into practice and puts forward related suggestions.This paper mainly consists of three parts:dividend distribution status description, causes analysis and empirical test. This report focus on the high cash dividend which is a feature for GEM companies to attractive people’s attentions. High cash dividend is not an absolute existing. it is a result after compared with main-board market. This report considered, the level of Main-Board Market listed company is a reasonable frame of reference.According to the domestic and foreign research on dividend policy reviews and collection, combining the actual situation of the second-board market listed company, this report will analysis the managers of GEM listed companies and consider the self features of the listed company in order to analysis in a complete framework. Firstly, this report put forward the herd behaviour and cash-acquiring motivation of managements two assumptions. Secondly, based on the fundamentals information of GEM listed companies, puts forward the backflow of over-raised funds and persistent profitability two hypotheses. Listed company in the IPO periods collected plenty of funds and regulators have a strict limit to use the funds. When the fund are free, the company will feed back the capital to the shareholders. Puting forward persistent hypothesis is because the surplus is the ultimate source of dividend. From the point of view of the surplus to analysis of corporate dividend distribution can not only test the rationality of share out bonus, but also can examine this share out bonus in future behaviour is sustainable.This paper reached several conclusions based on theoretical and empirical analysis:(1) herd behavior does not exist on GEM when deciding the dividend policy. High cash dividend phenomenon is not caused by irrational factor of management.(2) The cash-acquiring assumption is verified. Managements of GEM companies do have the motive to acquiring cash through dividend as compensation for potential loss caused by stock circulation limits.(3) Over-raised funds composed one of the sources of cash dividend. This might reflect either companies on GEM faced a investment bottle-neck or there are problems existing in over-raised funds management.(4) Cash dividends are strongly backed by persistent profitability of GEM companies. Managements of GEM companies might use cash dividend as a "high profitability" signal to investors.The lead conclusion that "cash dividend clustering" and "high cash dividend" is essentially driven by consistent profitability of listed companies on GEM leads to two main suggestions:(1) Reasonably plan and make use of the over-raised funds. For companies on GEM, immaturity signifies future abundant investment opportunities. Management should make preparations for further development by retaining over-raised funds and create investment opportunity via cooperation, doing research and so on.(2) Strictly supervise the GEM stocks circulation, alleviate the cash-acquiring motive of managements. On one hand, employ relevant measures to limit the stock price within a range of rationality while not impairing the activity of GEM. On the other hand, pay attention to cultivate investors’awareness of long-term investment.The existing research on dividend distribution is based on the Main-Board Market of the data, so this paper in the research of the theory and practice has three contributions. Firstly, This paper constitute a complete research framework, overcoming the defect that only adopt single perspective in most past researches. Secondly, we can provide the bottleneck of dividend distribution research to open up a new field to research. Lastly, dividend distribution analysis can help understand the company governance and development aspects of the problem and the management of the psychological behaviour, in order to improve the management of the company and provide related suggestions. Through the interpretation of the dividend distribution, it also can supply the rationality basis of some related dividend phenomenon to enterprise market investors.The limitations of this research are mainly three points. First of all, it was within three years since the foundation of Chinese GEM. Drawback in sample capacity might weaken the accuracy of result. Secondly, this paper only discusses herd behavior theory and cash-acquiring incentive when study the managements’ motives from psychological perspective, lacking integrity of theory frame. Lastly, the result of empirical study in this paper only confirms the positive relationship of cash dividend and past profit of listed companies on GEM. Conclusion that cash dividend reflects future profitability can’t reached by present evidence.