| Summary: | Abstract
This paper examines the dividend setting behaviour of companies listed on Chinese stock exchanges. The paper uses a firm-level panel data set of publicly traded firms on the Shanghai Stock Exchange (SHSE) and Shenzhen Stock Exchange (SZSE) between 2001 and 2008, where firms are limited by a number of restrictions. The study develops eight research hypotheses, which are used to represent the main theories of corporate dividends and the special characteristics of Chinese listed companies and stock markets. A general-to-specific modeling approach is used to choose between the competing hypotheses. The study examines the determinants of the amount of dividends using Tobit specifications because a substantial fraction of the observation on the dependent variable (cash dividends per share) takes a limited value (in this case 0). The results suggest that profitability, leverage status, firm size, cash generating ability, the proportion of the largest shareholder’s ownership, the proportion of tradable shares, and stock dividends are found significantly affect the amount of dividends paid; and these factors seem to be determinant factors of corporate dividend policy in China. However, not all of these factors can affect dividend policy each year. The factors that have influence on cash dividends payments were changing year by year during the period of study.
|
|---|