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Issued H shares of domestic listed companies cash dividend policy

Author: LinChangWei From: www.yourpaper.net Posted: 2010-04-19 20:31:18 Read:
Paper Keywords: agency theory of dividend policy cash dividends
Summary of thesis: In this paper, the 2007 sample cross-section data in the Mainland and Hong Kong listed company with the only company listed in the Mainland between the two groups. Its cash dividend status differences. In order to test the impact of different market environment, the cash dividend of shares of listed companies. And analyze the reasons why the existing dividend theories
The dividend policy has two main forms: cash dividends and stock dividends. In addition to the reserve fund, allotment strict form. The issuance of stock dividends does not affect the cash flows of the listed companies. Just change the changes in owners' equity of the Company's financial statements. The cash dividend will directly reduce the listed company's cash flow. Increase in cash in the hands of the shareholders. Cash dividends to better reflect the business philosophy of a listed company and treat the attitude of investors This paper analyzes the presence or absence of H shares of domestic listed companies cash dividend dividend policy differences. Agency theory and application of dividend policy to be analyzed. Recommendations
dividend agency theory Introduction
Agency theory is considered. The majority of the shareholders and the company "insiders" - managers and controlling shareholders (as many cases senior managers directly from the controlling shareholder) between the principal-agent problem, their interests are in conflict; insiders as an agent may use of company resources for their own profit. Damage as principal and other shareholders, in particular, the interests of small shareholders.
The first agency cost theory is applied to the dividend policy research Rozef (1982), he relaxed the assumption of zero transaction costs, he said. Due to the separation of company ownership and management of the agency problem between shareholders and managers of the company. Company managers as agents of the shareholders. Not act to maximize shareholder value. In this case, to take appropriate dividend policy will help to eliminate or reduce agency costs. Ensure that the interests of shareholders. This is because the payment of cash to reduce internal cash flow can take advantage of other cash dividends. The companies have to re-enter the securities market financing to develop new projects. Investors and professional institutions have the opportunity to internal supervision and restraint.
An effective way to solve the agency problem is to improve the protection of the rule of law for shareholders. But the law current for the company to send. There are two very different perspectives. One view is that the company sent the existing shareholders to protect the rule of law. The more complete the legal system. The more shareholders can take advantage of the rights conferred by law to put pressure on the company to strive for high cash dividends. Shareholders protection degree of perfection of the legal system and send the current ratio is positively correlated: Another view is that. The company sent is now the the shareholders a substitute for the protection of the rule of law. In the case of imperfect legal system. High camp now establish the interests of shareholders and good reputation to attract investors. Shareholders protection degree of perfection of the legal system to send the current ratio of negative correlation
Second, the sample data research
(A) sample selection and data sources
The paper selected two different sets of samples: the first sample in the domestic market at the same time the issue of H shares in Hong Kong companies to weed out the yet to be announced in April 20, 2007 annual financial report and ST, S class AG. Selected a total of 37 samples. The second set of samples. Only in the Shanghai Stock Exchange, there is no issue of H shares on the Hong Kong Stock Exchange listed companies. Exclude loss-making enterprises to April 20 the company has not yet published results. Through random sampling. Selected 50 samples to the latest annual report of 2007 listed companies financial data is selected as the observed value. Specific data sources Shanghai Securities News.
(B) data variables to determine
The two sets of data, select the data of the three variables are: earnings per share. Per share cash dividend. Dividend per share ratio.
(C) descriptive statistics

As can be seen from the table, the first group (in the Mainland and Hong Kong listed company) per share cash dividend mean is 0.1951. Cash dividends standard deviation of 0.15. The cash dividend per share ratio of the mean is 0.3355. Cash dividends standard deviation of 0.1876.
The second group (only companies listed in the Mainland) per share cash dividend mean is 0.1417. The cash dividend per share for the standard deviation is 0.30013. The average proportion of cash dividends per share is o. 2344, cash dividends standard deviation is 0.26546.
(D) non-parametric test statistical analysis between the two groups
I do not know This article discusses the two groups which have the same distribution, so I chose the method of non-parametric tests. In order to test whether the profit-sharing ratio between the two groups has significant differences. Due to the profit-sharing ratio relative index to better reflect the attitude of a cash dividend policy. Absolute indicators of cash dividends by earnings per share. Select only the profit-sharing ratio for non-parametric test by SPSS statistical analysis software, using the Mann Whitney U test, draw the following data:

Mann-Whitney U test results. Mann Whitby U statistic is 638.000, Wilkes W statistic is 1913.000.2 value is -2.479 0.013 <0.05, two-tailed progressive significance probability. Therefore we can see that the profit-sharing ratio between the two groups with significant differences.
(E) Statistical analysis
It can be seen from the description of Statistical sample. Domestic and Hong Kong listed companies at the same time its dividend the mean of the absolute value of the ratio value is higher than the only company in the domestic market. And. China and Hong Kong-listed companies cash dividend standard deviation and the proportion of the value of the standard deviation smaller than the only company listed in the Mainland, it explains why. The companies listed in both places at the same time the relative importance of cash dividends to shareholders. And its cash dividend policy is relatively little difference in the overall. Relatively close, and only in the domestic market, the company's cash dividend policy are great differences in their own ways. In a further non-parametric statistical tests. The results of two different groups having a significant difference. Combined with the results of the descriptive statistics. We can know. The companies listed in both places at the same time pay more attention to the cash dividend. The allocation ratio is also significantly higher. Overall, the policy differences between the companies is relatively small.
, conclusions and recommendations
The overall market environment of the stock dividend dividend policy of listed companies have a greater impact. A sound legal system of Hong Kong stock market. Shareholders to use legal means to fight high cash dividends. Combine the above statistical analysis we can conclude: Passion is now the result of the shareholders' legal protection. The more complete the legal system. The more shareholders can take advantage of the rights conferred by law to put pressure on the company to strive for high cash dividends. Therefore, the degree of perfection of the legal system and send the current ratio of shareholder protection is positively correlated. Because domestic companies listed on its cash dividend payout ratio has been in a very low level. The same is domestic listed companies. When they are listed in Hong Kong. By the shareholders to protect the supervision of the legal system. Cash dividend policy becomes reasonable to regulate them.
Another reason is that domestic listed companies listed in Hong Kong can achieve relatively high dividends relative to mainland investors from Hong Kong investors more rational. Focus on the company's cash dividend. Cash dividend as one of the criteria to measure the value and strength of a company, not only to short-term speculation. Spread as the only way of investment income.
The modern agency problems. Cash dividends can be used as an effective means to solve agency problems for stock market investment. The Government has been promoting the rational long-term investment. However, due to the low proportion of domestic dividends of listed companies. Not standardized, so you can not develop a good investment philosophy in the stock market. Contrast the Hong Kong stock market environment, from the point of view of the changing market environment. Cash dividends in the Mainland of China listed companies rationalize the status quo trends. Can be considered from the following aspects:
(A) establish and improve the securities market supervision and the legal system
Split share structure reform to solve the conflict of interest between the tradable shares and non-tradable shares. But did not solve the weak position of small and medium investors market regulatory authorities should be the rule of law and policy arrangements. Full protection of small investors to the interests of the cash dividend. Restrictions largest shareholder, internal managers through the encroachment of funds for personal gain
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