The Empirical Research Of The Relationship Between Dividend Distribution Policy And Business Performance

Dividend distribution policy has been always the core content of financial business of listedcompanies, and it always haunts the company’s managers, shareholders, investors and creditors.Dividend distribution policy of listed company has great impact on its business performance. Theappropriate dividend distribution policy can produce better business performance of listedcompany. Therefore, it can make the company has a long-term stable development conditions andopportunities. So it is the necessary to explore the relationship between dividend distributionpolicy and corporate performance. The dividend distribution policy mainly includes the followingcontents: whether the dividend should be distributed, how to distribute the dividend, how muchdividend should be distributed.This paper selected listed companies of textile and garment industry as a sample to empiricallyexplore the relationship between dividend distribution policy and corporate performance. Thisarticle selects the data of companies of Chinese textile and apparel industry in the latest threeyears (from2010to2012) for research. Through the t test, analysis of variance and regressionanalysis, this paper found the following results:(1) Whether or not to distribute dividend had aneffect on corporate performance. Corporate performances of companies that distribute dividendwere better than that not distribute dividends.(2) There was a positive correlation between theallocation ratio of dividends of listed companies and corporate performances.(3) The stability ofdividend distribution had an impact on corporate performance. Companies with stable dividenddistribution policy had better corporate performances than companies with unstable dividenddistribution policy. In summary, listed company’s dividend distribution policy had a large effect oncorporate performances.According to the conclusion, this paper provided six advices for the dividend distributionpolicy of the listed company in textile and garment industry:(1) selecting the appropriate dividenddistribution policy;(2) improving corporation’s profitability;(3) optimizing equity structure;(4)standardizing internal governance structure;(5) standardizing market order; and (6) perfecting theconstruction of laws and regulations. This article also discussed the limitations and directions forfuture researches.