Research On The Dividend Distribution Policy Of China’s Listed Companies

Dividend distribution policy is an critical monetary choice for listed companies.Dividend distribution policy not only concerns the immediate interests of all shareholders of the enterprise,but also affects the production and operation,financing management and long-term development of the enterprise.Gree Electric,the leader in the home appliance industry,has paid dividends up to 21 times since its listing in 1996,with only 1997,2006 and 2017 without dividends,especially during 2012-2018 when it continued to implement a dividend policy of high cash dividends,and the dividend payment rate of Gree Electric declined in 2019 due to the impact of the epidemic.Therefore,in order to enhance shareholders’ investment confidence and promote the steady development of listed companies and the securities market,the selection and formulation of a scientific and reasonable dividend distribution policy is of certain importance to the listed companies themselves.So,how has Gree Electric maintained its high percentage of cash dividends for many consecutive years? What factors influence its dividend policy? What kind of impact does the high dividend policy have on corporate value? How does the market react to the fluctuation of dividend policy? This paper addresses these questions.This paper takes Gree Electric as the research object,mainly adopts the case study method and comparative analysis method,based on agency cost theory and signaling theory,etc.,and conducts an exhaustive analysis of dividend distribution policy with Gree Electric’s 1996-2020 full operation cycle,and studies the influencing factors of dividend policy formulation and implementation and its economic consequences.The research results show that the company’s financial performance,equity structure,principal-agent cost,the life cycle it is in,as well as the macroeconomic environment and legal and regulatory constraints are the factors that influence GREE’s dividend policy;the paper analyzes the economic consequences of GREE’s dividend policy from multiple perspectives,showing that GREE’s dividend policy of high cash dividends brings about an increase in corporate value,and the no-dividend policy,on the other hand,causes a negative market reaction.The paper concludes with relevant recommendations: balance investment and distribution,set a reasonable dividend payout rate;issue stock dividends and diversify dividend distribution forms;optimize the equity structure and improve the governance mechanism;treat investment opportunities cautiously and enhance the competitiveness of core products.We hope to provide some help to Gree Electric and other listed companies in the same industry in formulating dividend policies.