The Research on the Influencing Factors of Dividend Distribution
Policy: Based on Empirical Data of Chinese Listed Companies in
2013-2016
Xiaohong Xiao and Chengxu Zhou
College of Business Administration, Guizhou University of Finance and Economics, Guiyang, China
Keywords: Growth Enterprise Market, Dividend Policy, Influencing Factors, Empirical Research, The R Programming
Language, Multiple Linear Regression.
Abstract: As an important content of corporate financial management, dividend distribution policy is not only the
distribution of shareholders' investment income, but also related to the company's investment, financing and
other aspects. As a new product of the capital market at home and abroad, growth enterprise market has
relatively relaxed listing conditions, which makes the dividend distribution policy distinctive. Based on the
data of China's listed companies from 2013 to 2016 on growth enterprise market, this paper uses the R
programming language for modeling, and uses multiple linear regression to study the influencing factors of
cash dividend payment level, so as to provide reference for enterprises to formulate dividend distribution
policies.
1 INTRODUCTION
Since the development of China's stock market,
random and blind have become two fatal problems in
dividend policy formulation of listed companies in
China. The problem is that enterprises cannot
properly consider dividend distribution according to
their own situation. Therefore, the research on the
influencing factors of dividend distribution policy of
listed companies has become a hot topic. Growth
enterprise market (GEM) was established in China in
1998, and because of its more relaxed entry
conditions compared with the main board market, it
provides a broad platform for many small and
medium-sized enterprises with development potential
in China. Gem has the characteristics of high growth
and high risk, and the listed companies on it have
different business nature. At the same time, the
enterprise is subject to the China Securities
Regulatory Commission's (CSRC's) strict
requirements of dividend supervision, which makes
the formulation of dividend distribution policy full of
pressure.
By reviewing the literature and related theories
(Farrar 2007,
Linzenberger 1982
) and combining
with the research theme, this paper sorted out the
factors affecting dividend distribution from the inside
and outside of enterprises, providing ideas and
theoretical basis for the study of this paper. Based on
the subdivision of the influencing factors of dividend
distribution policy, this paper systematically solves
the problem of "how much to divide" and focuses on
the main problem of what factors affect the level of
cash dividend payment.
Based on the empirical data of gem listed
companies, this paper uses empirical methods to test
the factors that affect the level of corporate cash
dividend distribution. This paper has the following
positive significance: Firstly, for enterprises, this
study provides reference value for enterprises to
formulate cash dividend distribution policies, help
enterprises improve financial management, establish
a good image, and enhance investor confidence.
Secondly, the research helps shareholders to protect
their own rights and interests, balance their own
interests, reduce investment risks, and make them
rational investment. At the same time, it can
strengthen the supervision of the public and relevant
regulatory departments on the behavior of corporate
dividend payment, further improve the governance
system, so as to achieve efficient and reasonable
allocation of social resources, and achieve economic
growth and reduce resource waste.
Xiao, X. and Zhou, C.
The Research on the Influencing Factors of Dividend Distribution Policy: Based on Empirical Data of Chinese Listed Companies in 2013-2016.
DOI: 10.5220/0011174100003440
In Proceedings of the International Conference on Big Data Economy and Digital Management (BDEDM 2022), pages 281-285
ISBN: 978-989-758-593-7
Copyright
c
2022 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
281
2 MATERIALS AND METHODS
2.1 Sample
In this paper, A-share GEM enterprises listed in
Shanghai Stock Exchange from 2013 to 2016 are
selected as research data, mainly from the CSMAR
database, and samples are screened according to the
following rules: First, companies that carry out
annual dividend distribution are selected as research
objects. Second, the data focuses on listed companies
that have distributed cash dividends. Third, ST and
PT enterprises will be excluded from the sample, for
these enterprises have been in a deficit state for years,
and the dividend policy is abnormal. Fourth, exclude
the listed companies that issue B shares, H shares and
N shares at the same time, as well as financial listed
companies such as bank securities. Finally, eliminate
companies with missing key financial data and
extreme values.
2.2 Dependent Variable
To solve the problem of "how much to divide", the
dependent variable is the distribution level of cash
dividends, that is, cash dividends per share, expressed
by CDPS. The CDPS was measured as follows: total
cash dividends divided by number of common shares.
The selection of this index mainly refers to the
research of Li et al (2018) (
Li, et al, 2018
).
2.3 Independent Variable
The shareholding concentration is mainly based on
the research of Zhang (2017) (Zhang 2017), using the
shareholding ratio of the largest shareholder for
measurement (SH1).
The index selection of enterprise scale, liabilities,
development capacity and business capacity mainly
refer to the research results of Crutchiey and Hansen
(2017), Ma and Ye (2016), Yang et al (2018)
(Crutchely 2017, Ma, Ye 2016, Yang, et al, 2018).
We choose total assets (natural logarithm), asset-
liability ratio, main business income (natural
logarithm), accounts receivable turnover and
inventory turnover to measure respectively,
expressed by LN(A), DEBT, MBRG, ARTrat, ITO.
Profitability mainly refers to the research of
Sheng (2004)
[8]
, and chooses earnings per share
(EPS), and net asset value per share(NAPS) as
measurement factors.
The measurement of corporate cash flow capacity
mainly refers to the research results of Li et al (2018)
(
Li et al. 2018
), adopting indicators such as net cash
flow from operating activities per share (OpeCFPS)
and return on cash from asset operations (OpeCass).
The measurement of investment value mainly
refers to the research results of Yang et al (2018)
(Yang, et al, 2018), and adopts price-earnings ratio
(PE).
Specific indicators and measurement methods are
shown in Table 1.
Table 1: Variable Definitions.
Type Name Abbreviation Measure
dependent
variable
Distribution Level of
Cash Dividends
CDPS
Total cash dividends divided by number of
common shares
independent
variable
Shareholding
Concentration
SH1
Number of shares held by the largest shareholder
divide
d
b
y total share capital
Enterprise Scale LN(A) Take the natural log of total assets
Liability Situation DEBT Total liabilities divided by total assets
Development Capacity MBRG Take the natural log of main business income
Business Capacity ARTrat
Main business income divided by average accounts
receivable
ITO Main business cost divided by average inventory
Profitability EPS Net profit after tax divided by total equity
NAPS Total net assets divided by total equity
Cash Flow Capacity OpeCFPS
Net operating cash flow divided by total capital
stoc
k
OpeCass Net operating cash flow divided by total assets
Investment Value PE Market price divided by earnings per share
Industry Ind
If it belongs to this industry, the value is 1;
otherwise, the value is 0
Year Year
If it belongs to this year, the value is 1; otherwise,
the value is 0
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282
2.4 Model
This model is to test the influence of factors on the
cash dividend payment level of GEM listed
companies in China.
CDPS
,
=β
+β
SH1
,
+β
LN
A
,
+β
DEBT
,
+β
MBRG
,
+β
ARTrat
,
+β
ITO
,
+β
EPS
,
+β
NAPS
,
+β
OpeCFPS
,
+β
OpeCass
,
+β
PE
,
+Year+Ind
+μ
,
1
Among them, CDPS
,
represents the delivery rate,
β
represents the intercept term, represents the
regression coefficient, representing the influence
degree of each factor on CDPS
,
, μ
,
represents the
random error term.
3 RESULTS AND DISCUSSION
3.1 Basic Statistics
In order to understand the statistical characteristics of
variables, descriptive statistics were conducted for
them. The specific data are shown in Table 2.
Table 2: Statistics and Correlation of Variables.
Minimum Maximum Mean Std. Deviation
CDPS 0.002 9.992 2.336 3.334
O
p
eCass -0.354 0.488 0.037 0.071
SH1 4.150 89.850 32.111 12.905
LN(A) 18.961 24.448 21.147 0.780
DEBT 0.011 9.935 0.989 2.097
MBRG 15.742 24.807 20.258 0.883
ARTrat 0.204 67.662 4.626 5.821
ITO 0.000 79.190 5.152 7.933
EPS -9.320 9.790 0.707 1.401
NAPS 0.752 31.544 4.953 2.572
O
p
eCFPS -12.773 9.997 0.408 2.598
PE 28.503 281.402 82.383 39.975
3.2 Regression Analysis
Multiple linear regression was performed for all
variables, and the results were obtained as shown in
Regression 1 in Table 3.
In the equation, the regression coefficient of
LN(A) is -0.166, indicating that the enterprise size is
negatively correlated with the level of cash dividend
payment. The regression coefficient of DEBT is -
0.083, indicating that corporate debt is significantly
negatively correlated with cash dividend payment
level. The regression coefficients of EPS and NAPS
are 5.295 and 0.263, indicating that corporate
profitability is positively correlated with corporate
cash dividend distribution level. The regression
coefficients of OpeCFPS and OpeCass were 0.139
and 0.004 respectively, indicating a significant
positive correlation between cash flow capacity with
explained variables. The regression coefficient of PE
is 0.011, indicating that corporate investment value is
significantly positively correlated with the level of
corporate cash dividend payment.
By comparing the standard coefficient, it can be
seen that earnings per share is the largest explanatory
variable of the coefficient, and net asset per share is
the second explanatory variable of coefficient. In
addition, the two indicators of profitability have the
highest influence on the explained variables, and their
coefficients are both positive, which indicates that
corporate profitability has the most important
influence on the level of cash dividend payment, and
it is positively correlated with it. Enterprises with
higher profitability have higher capital abundance,
which provides a strong guarantee for cash dividend
distribution.
The Research on the Influencing Factors of Dividend Distribution Policy: Based on Empirical Data of Chinese Listed Companies in
2013-2016
283
In order to verify the stability of the conclusion,
the index was replaced. Logarithm of total assets (LN
(A)) was replaced by logarithm of total equity (LN
(S)) and the asset-liability ratio (DEBT) was replaced
by the current ratio (CR). What’s more, we also
replace two earnings measures with return on equity
(ROE), and price-earnings ratio (PE) with price to
book ratio (PB). The indexes replaced above were
regressed again, and the results were shown in
Regression 2. In addition, we replace the logarithm of
main business income (MBRG) with the growth rate
of net profit (NPGR) and then make a regression
again, obtaining the results in regression 3. The
results show that there is no significant correlation
between the level of cash dividend payment and the
operating capacity of GEM listed companies.
Table 3: Results of Regression Analyses.
Variable Re
g
ression1 Re
g
ression2 Re
g
ression3
(Constant) 11.821 8.324
***
9.307
SH1 -0.005 -0.002 -0.003
LN(A) -0.166
***
-0.102
***
DEBT -0.083
**
-0.029
***
MBRG -0.105 -0.351
ARTrat 0.007 0.005 0.011
ITO 0.006 0.024 0.017
EPS 5.295
***
0.168
***
NAPS 0.263
***
0.013
***
O
p
eCFPS 0.139
***
0.017
***
0.047
***
OpeCass 0.004
***
0.052
***
0.018
***
PE 0.011
***
0.037
***
CR 0.047
**
LN(S) -0.017
***
ROE 0.024
**
PB 0.154
***
NPGR 0.259
𝐑
𝟐
0.823 0.842 0.811
F-statistic 116.265
***
158.963
***
129.452
***
3.3 Robustness Checks
In order to ensure the reliability of the research
conclusions, we conduct a robustness test by reducing
the sample size. Specific robustness test results are
shown in Table 4. The test results show that the
conclusion is reliable and the model is robust.
Table 4: Robustness Checks.
Dependent Variable: CDPS
Variable
Unstandardized
Coefficients
(Constant) 5.339
SH1 -0.009
Ln(A) -0.008
***
DEBT -0.035
***
MBRG -0.112
ARTrat 0.011
ITO 0.005
EPS 0.156
***
NAPS 0.118
***
OpeCFPS 0.036
**
O
p
eCass 3.983
***
PE 0.006
***
4 CONCLUSIONS
Through empirical analysis, this paper draws the
following conclusions: The financial indicators that
affect the level of cash dividend payment of GEM
listed companies mainly include price-earnings ratio,
net asset value per share, net cash flow generated by
operating activities per share, total asset logarithm,
earnings per share and asset-liability ratio. It shows
that the investment value, profitability, cash flow,
enterprise size and debt have a significant impact on
the cash dividend payment level of GEM listed
enterprises in China. Among them, corporate
profitability is the most important factor determining
the level of corporate cash dividend distribution, and
it is positively correlated with the level of cash
dividend payment. Enterprise size and liabilities are
negatively correlated with corporate cash dividend
distribution level, while enterprise investment value
and cash flow are positively correlated with corporate
cash dividend distribution level. However, the
shareholding ratio of the largest shareholder, revenue
logarithm of main business, receivables turnover and
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284
inventory turnover have no obvious influence on the
dividend payment level of GEM listed enterprises in
China.
Based on the above conclusions and analysis, this
paper will start from the internal environment of
enterprises, put forward some suggestions on some
irregularities in the current dividend distribution
policy of my country's GEM enterprises, strengthen
self-construction, improve self-quality, and carry out
continuous optimization and innovation to realize the
standardization of policies, healthy.
Corporate profits are the main source of dividend
distribution. Since cash dividends are significantly
positively correlated with profitability, GEM
companies as market players should strengthen their
own innovation and construction capabilities and
management level for the purpose of improving their
own profitability, and establish and improve. The
performance evaluation system of listed companies is
used to monitor the performance of listed companies
during the event, improve the corporate governance
structure, invest in research and master core
technologies in their respective fields, innovate new
products, use it as the core competitiveness of the
company itself, and continuously increase efforts to
invest in the market development, is committed to
building the brand effect of the enterprise, according
to its own strategic planning, while paying attention
to the quality of profit, pay attention to the effective
control of the adequacy of cash flow generated in
business activities, so that a large amount of surplus
generated by the enterprise can bring real cash flow,
thereby reducing the pressure on companies to
formulate dividend policies.
According to the above research results, the
investment value of the company itself will affect the
formulation of the company's dividend distribution
policy. Therefore, it is necessary to improve the
internal control system, improve the effectiveness of
internal control, provide a strong guarantee for the
transparency of corporate information disclosure,
reduce related problems with no substantive content,
formalism, and empty responses, strengthen its
transparency, and increase efforts to develop capital
market, adjust the enterprise's own management
mode, production mode, etc., continuously improve
the ability to respond to the market, better understand
and grasp the market operation, enhance investors'
information about the enterprise, thereby improving
the investment value of the enterprise itself.
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2013-2016
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