IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v8y2020i10p1689-d422694.html
   My bibliography  Save this article

Analysis of the Dividend Policy Decision-Making Mechanism of Chinese and Taiwanese Lithium Battery Industries

Author

Listed:
  • Tzu-Chun Sheng

    (Department of Finance, Ling Tung University, Taichung 408, Taiwan)

  • Alvin Chang

    (Department of International Business, Ling Tung University, Taichung 408, Taiwan)

  • Shu-Hui Lan

    (Department of Marketing and Logistics Management, Ling Tung University, Taichung 408, Taiwan)

  • Shih-Cheng Li

    (Department of Industrial Education and Technology, National Changhua University of Education, Changhua City 500, Taiwan)

Abstract

This study mainly focuses on the mechanisms and influencing factors of formulating dividend policies in the Chinese and Taiwanese lithium battery industries. According to the relevant literature, enterprises should consider financial status, project operations, the decision preferences of their executives, and shareholder equity when drawing up dividend policies. This study first uses the Modified Delphi Approach to set up the hierarchy analysis structure, and then use the Fuzzy Analytical Hierarchy Process for the study method. From the empirical results, this study finds that there exist differences between Chinese and Taiwanese lithium battery manufacturing supply chains, in terms of the process and considered factors when making decisions regarding dividend policies. The empirical results of the study show that dividend policies of Chinese lithium battery manufacturers emphasize more on the future growth of enterprises, earnings expectation and retained earnings, investment decisions, enterprise scale, and operating performance and profit whereas Taiwanese lithium battery manufacturers focus more on information asymmetry.

Suggested Citation

  • Tzu-Chun Sheng & Alvin Chang & Shu-Hui Lan & Shih-Cheng Li, 2020. "Analysis of the Dividend Policy Decision-Making Mechanism of Chinese and Taiwanese Lithium Battery Industries," Mathematics, MDPI, vol. 8(10), pages 1-16, October.
    • Handle: RePEc:gam:jmathe:v:8:y:2020:i:10:p:1689-:d:422694
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/8/10/1689/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/8/10/1689/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eugene F. Fama & Kenneth R. French, 2001. "Disappearing Dividends: Changing Firm Characteristics Or Lower Propensity To Pay?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(1), pages 67-79, March.
    2. R. E. Bellman & L. A. Zadeh, 1970. "Decision-Making in a Fuzzy Environment," Management Science, INFORMS, vol. 17(4), pages 141-164, December.
    3. Wanneng Yu & Suwen Li & Yonghuai Zhu & Cheng-Fu Yang, 2019. "Management and Distribution Strategies for Dynamic Power in a Ship’s Micro-Grid System Based on Photovoltaic Cell, Diesel Generator, and Lithium Battery," Energies, MDPI, vol. 12(23), pages 1-18, November.
    4. Anthony Flint & Andrew Tan & Gary Tian, 2010. "Predicting Future Earnings Growth: A Test Of The Dividend Payout Ratio In The Australian Market," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 4(2), pages 43-58.
    5. Atanassov, Julian & Mandell, Aaron J., 2018. "Corporate governance and dividend policy: Evidence of tunneling from master limited partnerships," Journal of Corporate Finance, Elsevier, vol. 53(C), pages 106-132.
    6. Fodil Adjaoud & Walid Ben-Amar, 2010. "Corporate Governance and Dividend Policy: Shareholders' Protection or Expropriation?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(5-6), pages 648-667.
    7. Caballero, Julián & Fernández, Andrés & Park, Jongho, 2019. "On corporate borrowing, credit spreads and economic activity in emerging economies: An empirical investigation," Journal of International Economics, Elsevier, vol. 118(C), pages 160-178.
    8. Huang, Shihping Kevin & Kuo, Lopin & Chou, Kuei-Lan, 2018. "The impacts of government policies on green utilization diffusion and social benefits – A case study of electric motorcycles in Taiwan," Energy Policy, Elsevier, vol. 119(C), pages 473-486.
    9. Lin, Boqiang & Wu, Wei, 2017. "Economic viability of battery energy storage and grid strategy: A special case of China electricity market," Energy, Elsevier, vol. 124(C), pages 423-434.
    10. Lin, Tsui-Jung & Chen, Yi-Pei & Tsai, Han-Fang, 2017. "The relationship among information asymmetry, dividend policy and ownership structure," Finance Research Letters, Elsevier, vol. 20(C), pages 1-12.
    11. Jaylson Jair da Silveira & Gilberto Tadeu Lima, 2017. "Employee Profit-sharing and Labor Extraction in a Classical Model of Distribution and Growth," Review of Political Economy, Taylor & Francis Journals, vol. 29(4), pages 613-635, October.
    12. Basil Al-Najjar & Yacine Belghitar, 2014. "Do corporate governance mechanisms affect cash dividends? An empirical investigation of UK firms," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(4), pages 524-538, July.
    13. Harold Demsetz, 1968. "The Cost of Transacting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(1), pages 33-53.
    14. Satish Kumar & Sisira Colombage & Purnima Rao, 2017. "Research on capital structure determinants: a review and future directions," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 13(2), pages 106-132, April.
    15. Franklin Allen & Antonio E. Bernardo & Ivo Welch, 2000. "A Theory of Dividends Based on Tax Clienteles," Journal of Finance, American Finance Association, vol. 55(6), pages 2499-2536, December.
    16. Aharony, Joseph & Dotan, Amihud, 1994. "Regular Dividend Announcements and Future Unexpected Earnings: An Empirical Analysis," The Financial Review, Eastern Finance Association, vol. 29(1), pages 125-151, February.
    17. Green, Richard C., 1984. "Investment incentives, debt, and warrants," Journal of Financial Economics, Elsevier, vol. 13(1), pages 115-136, March.
    18. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    19. Mitton, Todd, 2004. "Corporate governance and dividend policy in emerging markets," Emerging Markets Review, Elsevier, vol. 5(4), pages 409-426, December.
    20. Brav, Alon & Graham, John R. & Harvey, Campbell R. & Michaely, Roni, 2005. "Payout policy in the 21st century," Journal of Financial Economics, Elsevier, vol. 77(3), pages 483-527, September.
    21. Norman Dalkey & Olaf Helmer, 1963. "An Experimental Application of the DELPHI Method to the Use of Experts," Management Science, INFORMS, vol. 9(3), pages 458-467, April.
    22. Wendy Beekes & Philip Brown, 2006. "Do Better‐Governed Australian Firms Make More Informative Disclosures?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(3‐4), pages 422-450, April.
    23. Wendy Beekes & Philip Brown, 2006. "Do Better-Governed Australian Firms Make More Informative Disclosures?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(3-4), pages 422-450.
    24. Bonaventura, Matteo & Giudici, Giancarlo & Vismara, Silvio, 2018. "Valuation and performance of reallocated IPO shares," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 54(C), pages 15-26.
    25. M. J. Gordon, 1963. "Optimal Investment And Financing Policy," Journal of Finance, American Finance Association, vol. 18(2), pages 264-272, May.
    26. Luigi Lepore & Francesco Paolone & Domenico Rocco Cambrea, 2018. "Ownership structure, investors’ protection and corporate valuation: the effect of judicial system efficiency in family and non-family firms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(4), pages 829-862, December.
    27. Kieschnick, Robert & Moussawi, Rabih, 2018. "Firm age, corporate governance, and capital structure choices," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 597-614.
    28. Yoram Wind & Thomas L. Saaty, 1980. "Marketing Applications of the Analytic Hierarchy Process," Management Science, INFORMS, vol. 26(7), pages 641-658, July.
    29. David S. Koo & Santhosh Ramalingegowda & Yong Yu, 2017. "The effect of financial reporting quality on corporate dividend policy," Review of Accounting Studies, Springer, vol. 22(2), pages 753-790, June.
    30. Sun, Xin & Hao, Han & Zhao, Fuquan & Liu, Zongwei, 2017. "Tracing global lithium flow: A trade-linked material flow analysis," Resources, Conservation & Recycling, Elsevier, vol. 124(C), pages 50-61.
    31. Gugler, Klaus & Yurtoglu, B. Burcin, 2003. "Corporate governance and dividend pay-out policy in Germany," European Economic Review, Elsevier, vol. 47(4), pages 731-758, August.
    32. Jensen, Gerald R. & Solberg, Donald P. & Zorn, Thomas S., 1992. "Simultaneous Determination of Insider Ownership, Debt, and Dividend Policies," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 27(2), pages 247-263, June.
    33. Khaled Hussainey & Martin Walker, 2009. "The effects of voluntary disclosure and dividend propensity on prices leading earnings," Accounting and Business Research, Taylor & Francis Journals, vol. 39(1), pages 37-55.
    34. Hu, Aidong & Kumar, Praveen, 2004. "Managerial Entrenchment and Payout Policy," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 39(4), pages 759-790, December.
    35. Booth, Laurence & Zhou, Jun, 2017. "Dividend policy: A selective review of results from around the world," Global Finance Journal, Elsevier, vol. 34(C), pages 1-15.
    36. Grosse-Rueschkamp, Benjamin & Steffen, Sascha & Streitz, Daniel, 2019. "A capital structure channel of monetary policy," Journal of Financial Economics, Elsevier, vol. 133(2), pages 357-378.
    37. Elton, Edwin J. & Gruber, Martin J., 1970. "Homogeneous Groups and the Testing of Economic Hypotheses," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 4(5), pages 581-602, January.
    38. Wang, I. Kim & Seidle, Russell, 2020. "Ambition in innovation: Vicarious learning in the nascent electric scooter market in Taiwan," Technological Forecasting and Social Change, Elsevier, vol. 152(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hussein Abedi Shamsabadi & Byung-Seong Min & Richard Chung, 2016. "Corporate governance and dividend strategy: lessons from Australia," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 12(5), pages 583-610, October.
    2. Smith, Deborah Drummond & Pennathur, Anita K. & Marciniak, Marek R., 2017. "Why do CEOs agree to the discipline of dividends?," International Review of Financial Analysis, Elsevier, vol. 52(C), pages 38-48.
    3. Hasan, Mostafa Monzur & Uddin, Mohammad Riaz, 2022. "Do intangibles matter for corporate policies? Evidence from organization capital and corporate payout choices," Journal of Banking & Finance, Elsevier, vol. 135(C).
    4. Szilagyi, P.G., 2007. "Corporate governance and the agency costs of debt and outside equity," Other publications TiSEM 9520d40a-224f-43a8-9bf9-b, Tilburg University, School of Economics and Management.
    5. De Cesari, Amedeo, 2012. "Expropriation of minority shareholders and payout policy," The British Accounting Review, Elsevier, vol. 44(4), pages 207-220.
    6. Paul Tanyi & David B. Smith & Xiaoyan Cheng, 2021. "Does firm payout policy affect shareholders’ dissatisfaction with directors?," Review of Quantitative Finance and Accounting, Springer, vol. 57(1), pages 279-320, July.
    7. Renneboog, Luc & Szilagyi, Peter G., 2020. "How relevant is dividend policy under low shareholder protection?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 64(C).
    8. James, Hui & Benson, Bradley W. & Wu, Chen (Ken), 2017. "Does CEO ownership affect payout policy? Evidence from using CEO scaled wealth-performance sensitivity," The Quarterly Review of Economics and Finance, Elsevier, vol. 65(C), pages 328-345.
    9. Gyimah, Daniel & Gyapong, Ernest, 2021. "Managerial entrenchment and payout policy: A catering effect," International Review of Financial Analysis, Elsevier, vol. 73(C).
    10. Alzahrani, Mohammed & Lasfer, Meziane, 2012. "Investor protection, taxation, and dividends," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 745-762.
    11. Geetanjali Pinto & Shailesh Rastogi, 2019. "Sectoral Analysis of Factors Influencing Dividend Policy: Case of an Emerging Financial Market," JRFM, MDPI, vol. 12(3), pages 1-18, June.
    12. Ye, Dezhu & Deng, Jie & Liu, Yi & Szewczyk, Samuel H. & Chen, Xiao, 2019. "Does board gender diversity increase dividend payouts? Analysis of global evidence," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 1-26.
    13. Trojanowski, G., 2004. "Ownership structure as a mechanism of corporate governance," Other publications TiSEM 5dbc874d-d1d0-44a5-9717-8, Tilburg University, School of Economics and Management.
    14. Fairchild, Richard & Guney, Yilmaz & Thanatawee, Yordying, 2014. "Corporate dividend policy in Thailand: Theory and evidence," International Review of Financial Analysis, Elsevier, vol. 31(C), pages 129-151.
    15. Hussain Haroon & Md-Rus Rohani & Al-Jaifi Hamdan Amer & Hussain Rana Yassir, 2022. "Determinants of Corporate Pay-Out Policy and the Moderating Effects of Firm's Growth: Evidence from Pakistan," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(3), pages 65-101, September.
    16. Chintrakarn, Pandej & Jiraporn, Pornsit & Treepongkaruna, Sirimon & Mook Lee, Sang, 2022. "The effect of board independence on dividend payouts: A quasi-natural experiment," The North American Journal of Economics and Finance, Elsevier, vol. 63(C).
    17. Hui Liang James & Hongxia Wang, 2021. "Independent director tenure and dividends," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 48(5-6), pages 1057-1091, May.
    18. Basharat Khan & Qiujun Zhao & Amjad Iqbal & Irfan Ullah & Shahab Aziz, 2022. "Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea," SAGE Open, , vol. 12(2), pages 21582440221, April.
    19. Saeed, Abubakr & Zamir, Farah, 2021. "How does CSR disclosure affect dividend payments in emerging markets?," Emerging Markets Review, Elsevier, vol. 46(C).
    20. Ullah, Farid & Jiang, Ping & Ali, Farman & Wang, Xinyi, 2024. "Rookie directors and dividend payouts: Evidence from China," Research in International Business and Finance, Elsevier, vol. 70(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:8:y:2020:i:10:p:1689-:d:422694. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.