The Empirical Study Of The Governance Effect Of Cash Dividend Policies On Our Listed Companies

Listed company’s cash dividend policy is a very important financial decisionmaking. Rational dividend policy not only establish a good corporate image, tostimulate the company’s stock price performance in the secondary market, but alsoreduce agency costs within the company, improve the company value.Appropriatecash dividend policy is a good foundation of the company’s long-term steadydevelopment.This paper focus on analysis of the relationship between cash dividend policyand corporate governance.This study focuses on the governance effect of the cashdividend policy after the split share reform of listed companies in China. Then, basedon our practical, the paper focused on analysis the distribution characteristics andtrends of cash dividend policy since1992. The cash dividend policy of listedcompanies in China has become the main form of dividends. Then the paper explainthe feasibility of the cash dividend policy in the aspect of the agency theory. Last, thepaper explain the difference of the governance effect between the state and non-stategovernance of listed companies.Based on the qualitative analysis and theoretical analysis, this paper usemultiple linear regression model test the non-balanced panel of data. The resultsshows that listed companies can indeed reduce the agency costs and increase value ofthe company by distribute cash dividends.Return on assets of the company has asignificant role in promoting company’s value.Company’s debt level have a negativeimpact on company’s value. Company size is the inverse relationship with thecompany’s value.The proportion of state-owned shares and corporate value showed asignificant U-shaped relationship.On this basis, the paper further classifies the studysample and have a empirical test. The results show that compared to non-state-ownedholding companies, the cash dividend policy of the state-controlled listed companieswas more effective governance effect.Finally, based on the previous theoretical analysis and empirical testing, thepaper raises a number of specific policy recommendations about cash dividenddistribution.