Study on Dividend Policy and it’s Determinants Evidence from Chinese Companies

Antonio Goncalves de Andrade, Yang Qing


The present work conducts a study on dividend policy behavior from Chinese companies that are listed inNational Association of Securities Dealers Automated Quotations (NASDAQ) stock exchange. In this study Weuse ordinary least squares linear regression using panel data with random and fixed effects, using data of 75Chinese companies from 2010 to 2014 constructing a panel with 300 observations. Dividend payout is used as adependent variable while variables such leverage, profitability, liquidity, firm size, float, business risk, age, andasset structure is used as an independent variable. The result suggested that random effect model were moreappropriated. The results show an existence of positive relationship between dividend policy and age andnegative relationship between dividend policy and profitability. It suggests that Chinese firms that are larger tendto pay more dividends and firms that have higher profitability tend to pay lower dividends. Our findings providesupport for agency cost theory.Keywords: Dividend payout, panel data, Chinese companies and behavior.

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