Research On The Influence Of Cost Stickiness On The Cash Dividend Distribution

Cash dividend is an important way for enterprises to distribute profits and shareholders to get investment returns.However,the concept of "paying more attention to financing than to dividend" has always existed in China’s capital market,which makes many enterprises adopt low cash dividend payment policy.This phenomenon not only reflects the unhealthy state of the capital market,but also goes against the long-term steady development of the enterprise.We note that the level of cash dividend payment depends on the company’s current earnings.Cost,as a revenue offset,has a significant impact on the company’s earnings.All the cost management behaviors will eventually interfere with dividend policy by affecting the resource allocation of enterprises.Existing studies have found that cost and business volume do not present a complete symmetrical relationship,cost increase in business increase is greater than cost decrease in equivalent business decrease,which is called "Cost stickiness".In addition to cost stickiness,cost has also been proved to have the characteristics of "cost anti-stickiness",which can reveal the cost management behavior of enterprises.Therefore,we focus on these two perspectives to explore the impact of asymmetric behavior on cash dividend payment.It can discover the causes of low cash dividends,encourage managers to pay more attention to cost management and improve the efficiency of cost management.After collation and analysis of relevant theoretical literature,based on the cost asymmetry concept and investor expectation catering theory,this article puts forward hypotheses on the relationship between cost stickiness,cost anti-stickiness and cash dividends.Then we perform strict data screening on the collected data of Chinese listed companies from 2002 to 2020,and divide the samples into two sub-samples with cost stickiness and cost anti-stickiness,and use the left truncated model to carry out an empirical test.The regression results show that there is a negative correlation between cost stickiness and cash dividends,but it is not significant.There is a significant negative correlation between cost anti-stickiness and cash dividends.In general,cost asymmetry has a significant negative impact on cash dividends.Exactly,both cost stickiness and cost anti-stickiness increase operating risk and earnings risk,enterprises will reduce the level of cash dividend because they cannot sustain any higher level of dividend payouts in the future.In addition,this paper also studies the influence of semi-mandatory dividends on the relationship,and finds that semi-mandatory dividends,as a kind of external force,inhibits the negative impact of cost asymmetry on cash dividends.Further research indicates that compared with non-state-owned enterprises,the negative effect between cost asymmetry and cash dividend payment will be stronger in state-owned enterprises due to agency problems and self-interest motives.Moreover,the higher the asset intensity of enterprises,the more serious the degree of cost stickiness and cost anti-stickiness,and the more intense the negative impact of asymmetric behavior on cash dividend payment.This article studies cash dividend from the perspective of cost and separately analyzes the economic consequences of cost anti-stickiness on cash dividends,which enriches research literature on cost stickiness and cost anti-stickiness.At the same time,we uses investor expectation catering theory and loss aversion theory to explain the internal logic between cost asymmetric behavior and cash dividend,which provides a new application scenario for the catering theory in China.