Peer effects in corporate cash dividends policy

Using A-share listed companies as a sample, this paper investigates peer effects in corporate cash dividends policy from the perspectives of propensity and amount of dividend payments. We find robust evidence that firm's cash dividend payment propensity is significantly influenced by the policies of their industry peers. Moreover, peer influence on cash dividend payment is more pronounced among high-growth and low-cash flow firms. Meanwhile, we find little evidence about peer effects in dividend payments amount. These results indicate that under the background of semi-mandatory dividends rules, firms with high growth and low cash flow have to consider their peers' dividend policy and respond properly to obtain refinancing qualifications. However, what firms focus on is not their peers' payout amount but their propensity to pay dividends. Further research shows that information learning, industry rivalry and CEO reputation concerns are main driving factors of peer effects of corporate cash dividends policy. This paper helps us get better understanding of corporate payout policy in special institutional background and enriches corporate peer effects research. © 2021, Editorial Board of Journal of Systems Engineering Society of China. All right reserved.