The influence of financial constraint on peer influence of cash dividend decision – Evidence from China

Indicators	Observations	Mean	Standard deviation	Minimum value	Maximum value
β_MKT	214608	1.107	0.382	−13.088	4.887
β_SMB	214608	0.811	1.214	−10.784	37.164
β_HML	214608	−0.446	1.133	−19.25	20.891
β_MOM	214608	0.007	0.327	−4.943	8.215
α	214608	0.006	0.054	−0.641	1.963
R_ijt	214608	0.008	0.138	−0.69	4.049
${\hat{R}}_{ijt}$ {\widehat R_{{\rm{ijt}}}}	214608	0.013	0.104	−1.239	1.797
Idiosyncratic Return	214608	−0.004	0.119	−1.803	3.629

Variable definitions.

Variable name	Symbol	Variable definitions
Dividend decisions	Div_dum	Whether or not to pay DIV, pay DIV of 1, or 0
	Div_cat	Whether or not to pay catering dividend, pay catering dividend of 1, or 0
	Div_lev	Dividend level, the ratio of dividend per share to basic earnings per share

Peer influence	Peer_dum	Share of companies in the industry with the exception of target companies
	Peer_cat	Share of companies with peers that pay dividends other than target companies
	Peer_lev	Average dividend level for peer companies other than target companies

Peer average idiosyncratic equity shocks	Peer_ir	Average idiosyncratic return of peer companies calculated by Carhart four-factor model

Peer idiosyncratic volatilities	Peer_risk	The standard deviation of idiosyncratic return of peer companies calculated by Carhart four-factor model

Financial constraints	KZ	Calculated according to regression model of KZ index

Company size	Size	Natural logarithm of total assets at the end of the period

Cash ratio	Cash	Cash and cash equivalents balance/current liabilities at end of the period

Growth rate	Growth	(Gross operating income for the year - gross operating income for the previous year)/Gross operating income for the previous year

Growth	Tobin's Q	Market value/total end assets

Return on total assets	ROA	Net profit/total average assets for the year

Asset-liability ratio	Lev	Total ending liabilities/total ending assets

Established years	Life	Natural logarithm of the number of years of incorporation

Equity nature	Soe	The nature of a state-owned enterprise is 1, or 0

Equity concentration	Shr1	Share of the largest shareholder

Descriptive statistics of major variables.

Variable	Observations	Mean	Standard deviation	Minimum value	Median	Maximum value
Div_dum	18337	0.740	0.439	0.000	1.000	1.000
Div_cat	18337	0.094	0.292	0.000	0.000	1.000
Div_lev	18337	0.264	0.316	0.000	0.198	1.962
Peer_dum	18337	0.706	0.083	0.143	0.704	1.000
Peer_cat	18337	0.090	0.038	0.000	0.087	1.000
Peer_lev	18337	0.270	0.073	0.029	0.278	0.400
KZ	18337	1.144	1.794	−4.526	1.332	4.867
Size	18337	22.399	1.277	19.961	22.226	26.240
Life	18337	2.871	0.285	2.079	2.890	3.526
ROA	18337	0.036	0.056	−0.225	0.033	0.195
Lev	18337	0.451	0.201	0.062	0.449	0.887
Cash	18337	0.667	0.987	0.023	0.343	6.511
Growth	18337	0.191	0.464	−0.520	0.108	3.146
Tobin's Q	18337	1.995	1.306	0.000	1.591	8.135
Soe	18337	0.443	0.497	0.000	0.000	1.000
Shr1	18337	35.080	15.007	8.448	33.255	74.890
Peer_ir	18337	−0.004	0.011	−0.055	−0.006	0.062
Peer_risk	18337	1.397	1.380	0.001	1.624	4.962

Peer influence on dividend decision.

	Div_dum	Div_cat	Div_lev
Peer_dum	2.191** (0.028)
Peer_cat		4.225 (0.151)
Peer_lev			0.290 (0.297)
Control variables	yes	yes	yes
Year/Industry	yes	yes	yes
IV:
	Peer_dum	Peer_cat	Peer_lev
Peer_risk	0.012*** (0.000)	0.002*** (0.000)	0.016*** (0.000)
Peer_re	−1.343*** (0.000)	−0.564*** (0.000)	−1.048*** (0.000)
Wald test	4.53**	3.34*	1.51
N	18337	18331	18337

Robustness test of 4.4.1 and 4.4.2.

	Excluding samples that pay Bonus Shares			Add industry risk as a control variable

	Div_dum (1)	Div_cat (2)	Div_lev (3)	Div_dum (4)	Div_cat (5)	Div_lev (6)
Peer_dum	2.215** (0.023)			2.150** (0.026)
Peer_cat		4.448 (0.134)			4.116 (0.176)
Peer_lev			0.299 (0.299)			0.322 (0.246)
Ind_risk				−0.431 (0.687)	−0.685 (0.654)	0.200 (0.474)
Control variables	Yes	Yes	Yes	Yes	Yes	Yes
Year/Industry	Yes	Yes	Yes	Yes	Yes	Yes
IV:
Peer _risk	0.012*** (0.000)	0.002*** (0.000)	0.016*** (0.000)	0.013*** (0.000)	0.001** (0.029)	0.016*** (0.000)
Peer_ir	−1.395*** (0.000)	−0.569*** (0.000)	−1.050*** (0.000)	−1.365*** (0.000)	−0.542*** (0.000)	−1.056*** (0.000)
Wald test	5.14**	3.63*	1.41	4.62**	3.16*	1.92
N	17831	17825	17831	18337	18331	18337

Peer influence conduction path in different financial constrained companies.

	Div_dum

	Low financial	constraints	High financial	constraints
Low Financial Constraint GroupPeer_dum	1.824 (0.167)		2.478* (0.060)
High Financial Constraint GroupPeer_dum		2.142 (0.176)		2.868* (0.063)
Control variables	Yes	Yes	Yes	Yes
Year/Industry	Yes	Yes	Yes	Yes
IV:
Peer _risk	0.017*** (0.000)	0.006*** (0.000)	0.007*** (0.000)	0.019*** (0.000)
Peer_ir	−2.046*** (0.000)	−1.757*** (0.000)	−1.611*** (0.000)	−2.068*** (0.000)
Wald Inspection	1.17	1.04	4.72**	3.11*
Sample size	8184	8186	10151	10151

Robustness test of 4.4.3.

	Div_dum		Div_cat		Div_lev

	(1)	(2)	(3)	(4)	(5)	(6)
Peer_dum	2.170** (0.029)	9.337 (0.430)
Peer_cat			4.335 (0.141)	−62.262*** (0.000)
Peer_lev					0.285 (0.305)	−1.052 (0.387)
Peer_dum*SA		1.763 (0.551)
Peer_cat*SA				−17.143*** (0.000)
Peer_lev *SA						−0.352 (0.245)
SA	−0.857*** (0.000)	−2.126 (0.318)	−1.165*** (0.000)	0.516 (0.244)	−0.080*** (0.009)	0.011 (0.895)
Control variables	Yes	Yes	Yes	Yes	Yes	Yes
Year/Industry	Yes	Yes	Yes	Yes	Yes	Yes
IV:
Peer _risk	0.012*** (0.000)	−0.008 (0.119)	0.002*** (0.000)	−0.004 (0.111)	0.016*** (0.000)	−0.001 (0.902)
Peer_ir	−1.343*** (0.000)	0.755 (0.349)	−0.564*** (0.000)	−1.261*** (0.003)	−1.048*** (0.000)	3.025*** (0.000)
Peer _risk*SA		−0.005*** (0.000)		−0.001** (0.017)		−0.004*** (0.000)
Peer_ir*SA		0.544*** (0.008)		−0.180* (0.093)		1.054*** (0.000)
Wald inspection	4.59**	5.58*	3.44*	14.6***	1.47	2.05
Sample size	18337	18337	18331	18331	18337	18337

Financial constraints, peer influence and dividend decision.

	Div_dum		Div_cat		(3) Div_lev

	(1)	(2)	(3)	(4)	(5)	(6)
Peer_dum	2.246** (0.025)	2.371** (0.023)
Peer_cat			3.818 (0.204)	5.428* (0.080)
Peer_lev					0.304 (0.275)	0.254 (0.354)
Peer_dum*KZ		−0.002 (0.991)
Peer_cat*KZ				−1.977*** (0.009)
Peer_lev *KZ						−0.029 (0.417)
KZ	0.120*** (0.000)	0.120 (0.444)	0.182*** (0.000)	0.378*** (0.000)	−0.008*** (0.001)	0.000 (0.965)
Controls variables	Yes	Yes	Yes	Yes	Yes	Yes
Year/Industry	Yes	Yes	Yes	Yes	Yes	Yes
IV:
	Peer_dum	Peer mk	Peer_lev	Peer_dum	Peer mk	Peer_lev
Peer _risk	0.012*** (0.000)	0.013*** (0.000)	0.002*** (0.000)	0.002*** (0.000)	0.016*** (0.000)	0.015*** (0.000)
Peer_ir	−1.341*** (0.000)	−1.485*** (0.000)	−0.563*** (0.000)	−0.661*** (0.000)	−1.046*** (0.000)	−0.872*** (0.000)
Peer _risk*KZ		−0.000** (0.043)		−0.000*** (0.000)		0.000 (0.707)
Peer_ir*KZ		0.102*** (0.000)		0.066*** (0.000)		−0.114*** (0.000)
Wald test	5.07**	6.66**	2.98*	6.64**	1.61	1.02

N	18337	18337	18331	18331	18337	18337

eISSN:: 2444-8656
Lingua:: Inglese

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The influence of financial constraint on peer influence of cash dividend decision – Evidence from China

Pubblicato online: 12 nov 2021

Pagine: 309 - 322

Ricevuto: 07 mag 2021

Accettato: 23 lug 2021

DOI: https://doi.org/10.2478/amns.2021.2.00038

Parole chiavedividend decision, peer influence, financial constraint, conduction path, Carhart four-factor model

© 2021 Xiaolan Wang et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Carhart four-factor model regression descriptive statistics.

Variable definitions.

Descriptive statistics of major variables.

Peer influence on dividend decision.

Robustness test of 4.4.1 and 4.4.2.

Peer influence conduction path in different financial constrained companies.

Robustness test of 4.4.3.

Financial constraints, peer influence and dividend decision.

Parole chiave
dividend decision, peer influence, financial constraint, conduction path, Carhart four-factor model