Research On The Infuence Of Cash Dividend Policy Of Listed Companies On The Relationship Between Free Cash Flow And Inefficient Investment

From a macro perspective,investment is the most important factors in the study of macroeconomics and has a great impact on the country’s economic development.From the microscopic point of view,investment decision-making,as the core link of financial decision-making,is the main driving force for the growth of a company,is the source of cash creation,and determines the rise and fall of a company.Therefore,how to effectively formulate investment plans and increase investment efficiency is an important topic of concern for each investor,enterprise manager and scholar.The existing literature has studied non-efficiency investment from various angles and proposed relevant suggestions on how to suppress non-efficiency investment.However,there are few literatures on non-efficiency investment from the perspective of cash dividend.On the basis of previous studies,this paper uses the semi-mandatory cash dividend policy issued by the CSRC as the background,using the data of China’s Shanghai-Shenzhen A-share listed companies from 2014 to 2016 to study the effect of distributing cash dividends on the relationship between free cash flow and inefficient investment.It is hoped that a new perspective can be used to provide suggestions for the governance of corporate inefficient investments,as well as to test the rationality of semi-mandatory cash dividend policies and provide basis for relevant departments to further improve their cash dividend policies.This article draws on the model of expected investment effciency and combines with the mode of control variables proposed by Wen Zhonglin and other scholars to study the role of cash dividend policy as a regulatory variable.Through the empirical part of the data analysis,this paper summed up the following conclusions:(1)The free cash flow is significantly positively correlated with overinvestment and distributing cash dividends can inhibit excessive investment caused by free cash flow.(2)The free cash flow is significantly negatively related to underinvestment and distributing cash dividends can mitigate the underinvestment caused by fee cash flow.(3)The semi-mandatory cash dividend policy issued by the CSRC has a certain positive effect on the governance of non-efficiency investment at the current stage,and should also recognize its limitations.