Research Of The Impact Of Debt Financing On Corporate Cash Dividend

In recent years,the abnormal phenomenon has prevailed in China's capital market that the companies think highly of financing but ignore return.In order to curb the market freak,China Securities Regulatory Commission(CSRC)has introduced many laws and regulations,such as "Guidelines for the Supervision of Listed Companies No.3-Cash Dividends of Listed Companies",in an attempt to enhance the willingness of profit distribution of listed companie s and protect the right of investors to share the benefits of enterprises equally.It cannot fundamentally solve the phenomenon of "overvaluing financing,despising return" in China's capital market,although these measures have increased the level of dividend that is distributed by listed companies in a short time.The dividend policy is not just decided by the shareholders' meeting of the listed company,but is also the result of the game among shareholders,managers and creditors.As an important stakeho lder of enterprises-creditors,it naturally becomes a more innovative perspective to study dividend policy that how to exert its influence on the determination of dividend policy of listed companies.Through theoretical and empirical research,this paper hopes to find out the mechanism of debt levels and debt maturity impacting on the corporate cash dividend payment,enriching the research on dividend policy,and has a deeper understanding of dividend payment policy of listed companies in China,and prov ides some suggestions for relevant government departments to encourage listed companies to increase cash dividend payment.Based on the special status of creditors in corporate cash dividend policy,this paper tries to explore the mechanisms and ways of co rporate debt level and debt maturity affecting the dividend policy of listed companies from the perspective of debt level and debt maturity,and to study whether there are differences the relationship of between debt maturity and dividend policy under the condition of different enterprises.Therefore,the framework of this study is arranged as follows: The first chapter is an introduction.Firstly,this chapter introduces in detail the research background based on the laws and regulations that China Securities Regulatory Commission has introduced in recent years to encourage listed companies to increase cash dividend payments.Secondly,it summarizes the main literature at home and abroad on the debts affecting dividend policy,and makes comments on it.Fina lly,this paper puts forward the ideas,structure,methods,and puts forward the possible innovative points of this study based on the literature review.The second chapter introduces the related concepts,and raises the theoretical basis of this paper.Based on the theories,the part analyses the impact of debt level and debt maturity on cash dividend payment in detail.The third and the fourth chapter are empirical studies on the impact of debt level and debt maturity on cash dividend payment Firstly,th e data sources and research samples are defined.Secondly,it introduces the variables involved in the model.Thirdly,it carries out the descriptive statistical analysis and regression analysis of the main variables of sample companies.Finally,the corresponding regression results are tested for robustness.The fifth chapter is the summary of the full text,which summarizes the main conclusions,related suggestions and the prospects of this study.Based on the results of theoretical and empirical analysis,the paper comes to the following conclusions:(1)Debt levels is negatively correlated with cash dividend payment.Enterprises with higher debt level tends to face greater pressure of repayment due to excessive use of financial leverage.Under the conditions,rational enterprises should increase internal retention and reduce cash dividend payment.(2)Short-term borrowing restricts the cash dividend policy of listed companies.From the creditor's point of view,in order to prevent enterprises from using cash dividend policy to reduce free cash flow,creditors of short-term borrowing often restrict cash dividend in loan contracts.For listed companies,the proportion of short-term borrowing has increased.Due to the fixed debt repayment,enterprises must re tain sufficient funds to meet the maturity of future short-term borrowing repayment.Therefore,from the perspective of creditors and listed companies,short-term borrowing is negatively correlated with the willingness to pay cash dividends and the level of payment.(3)Compared with state-owned holding enterprises,the short-term borrowing of private enterprises has a greater impact on the cash dividend policy of listed companies.This is mainly due to the current credit system and soft budget constraints in China.On the one hand,the disadvantage of private enterprises in China makes it difficult for a large number of enterprises to obtain long-term credit support through banks.In addition,it is greatly hard for private enterprises to finance from stock market and bond market because of the restriction of enterprise assets and stable profits.Therefore,Most of the loans from private companies are short-term liabilities.On the other hand,compared with private enterprises,state-owned holding enterprises can easily obtain long-term credit support with the condition of lower financing costs from banks.Moreover,the actual control of state-owned holding enterprises is the government,and state-owned commercial banks are dominant in the banking industry,which leads to the soft budget of short-term loans of state-owned holding enterprises.Therefore,in terms of the source of funds and solvency,short-term debts have less restrictive effect on state-owned holding enterprises.