Empirical Study of the Factors Determining the Dividend Policy: the Context of Chinese Real Estate

In our work, we conducted a study of the dividend policy of Chinese companies involved in the real estate sector, and in particular we focused on the impact of capital expenditures and R&D on the dividend policy of companies, as well as the impact of these costs for companies with different levels of corporate governance. Our sample consists of observations for 96 companies over 13 years from 2010 to 2022. We used random and fixed effects models to analyze, tests showed that the fixed-effects model behaves better on our data. And we also applied the generalized method of moments for data reliability, the significance and signs of the variables of interest have not changed. The results show that capital expenditures have a negative impact on the dividend policy, whereas R&D has a positive impact. The positive impact of R&D costs can be explained by the legislative peculiarities of China, so the results do not coincide with the conclusions of the world literature in the field of corporate finance. It was also found out that companies with a high culture of corporate governance pay more dividends at the same cost of capital expenditures, which was not confirmed for R&D, we assume that this is due to the fact that companies engaged in R&D pay dividends at the limit of their capabilities due to regulatory requirements and therefore the importance of corporate governance for such costs is insignificant. Our work complements and expands the literature in the field of dividend policy and can be used by dividend investors to form a portfolio, as well as by the board of directors to determine the dividend policy of companies. This work can be complemented by the addition of new factors influencing dividends, such as public and private ownership of the company for different levels of corporate governance.