A Comparative Study Of Dividend Policy Between HKEx Listed Chinese Companies And A Share Companies

With the fast development of China’s financial market, more andmore Chinese mainland companies choose to be listed on HKEx,including Red Chips, Private Owned Companies and H shares. HongKong’s stock market is a developed one, it has more strict rules oninformation disclosure, trading and so on, and it also has more matureinvestors. All these factors must have huge impact on the Chinesecompanies listed in HKEx. This thesis try to compare the dividendpolicies between HKEx listed Chinese companies and A Share companies,and analyze the reason that cause the difference.Firstly, this thesis, in Chapter Two, reviews the existing theories andarticles of dividend policy around the world, including both theoryresearch and empirical research.Secondly, in Chapter Three, this article analyzes the dividend policiesof western developed financial market, and then concludes the impactfactors of these policies.In the Fourth Chapter, data collection and analysis is done to show the actual dividend level difference between A Share companies and HKExlisted Chinese companies from2006to2010. The purpose is to see whichgroup has higher dividend rate and which group has more stable dividendpolicy.In the Fifth Chapter, a multiple linear regression model is used forempirical study on the dividend policy impact factors. The factors testedin the model are EPS, ROE, Net Income Growth Rate, Asset Turnover,Debt to Asset Rate, Company Size, etc. Empirical study result shows: thefactors that significantly impact dividend policies are very differentbetween A Share companies and HKEx listed Chinese companies. Thefactors significantly impact A Share companies are mainly financialindicators and those impact HKEx listed Chinese companies are companysize and growth rate. This result clearly tells us that A share companies’dividend policies are easily impacted by their financial situation fromyear to year while HKEx companies’ dividend policies mostly considerthe companies’ long term development. So, in general, the dividendpolicies of HKEx listed Chinese companies are more stable and mature,they fit the developed financial market character.