Whether Cash Dividend Policy of Chinese Listed Companies Caters to Investors’ Preference

摘要

From the perspective of catering theory of dividends, this paper studies the relationship between cash dividend policy and investors’ preference, and also the relationship between cash dividend policy and enterprise features, making use of 2008-2014 data of listed companies in Shanghai and Shenzhen Exchanges. Our research discovers that rising corporate profitability and scale increase willingness to pay cash dividends of listed companies, whereas increasing investment opportunities significantly reduce the cash dividend payment. We create the variables of propensity to pay and dividend premium. The 2008-2014 dividend premium in Shanghai Exchange is negative and is negatively correlated with propensity to pay, showing that cash dividend policy still does not cater to investors’ preference after the completion of no-tradable shares reform.