Research On The Correlation Of Dividend Policy And Sustainable Growth

After the global financial crisis, how to maintain a healthy and stable growth of companies hasbecome the focus of governments. However, from a financial management perspective, growing toofast or too slow is not a good way. Compared with foreign enterprises’ extensive attention forsustainable growth, China’s enterprises pay seldom attention to it. Therefore, it is significant toresearch company’s sustainable growth. Dividend policy as an important financial decision, has been ahot spot of research home and abroad. There are many factors affecting sustainable growth, dividendpolicy is an important factor. There are few research on the correlation of dividend policy andsustainable growth, and existing research is not deep enough, so this theory research the correlation ofdividend policy and sustainable growth from both theoretical and empirical aspects.First, this paper describes the background, significance and contents. Normative research part,first describes the definition of the concept of sustainable growth enterprises, sustainable growthmodel and the theory of dividend policy. Based on the conclusion of existing research, analyse thefactors affecting sustainable growth, the research shows that dividend policy is an important factor forsustainable growth. Based on the induction of dividend policy and stock bonus mode, analyse fromthe perspective of Higgins sustainable growth model, the pecking order theory and the enterprisevalue theory, the conclusion is that there’s a close link between the dividend policy and sustainablegrowth. Empirical research part, this paper selects financial data of923A-shares listed companyiesfor the year2012as the research sample. Using Higgins sustainable growth model, descriptivestatistical analysis, Pearson correlation analysis and multiple linear regression models, respectivelyresearch the affect of the amount of the cash dividends, stock dividends and dividend payment tosustainable growth of enterprises, and make an empirical test of the relationship.Research findings show that dividend policy has an significant impact for sustainable growth.The distribution amounts of cash dividend and stock dividend has a positive correlation withsustainable growth. The sustainable growth rates of enterprises with mixed dividend distribution aregenerally higher than the enterprises with cash dividends.Dividend distribution of China’s enterprisesin line with the idea of sustainable growth, but vulnerable to the impact of policy-oriented.Listedcompanies in China has exogenous financing preference, and there is a potential for misappropriatingmotivation.