Who prefers regular dividends? The effect of inventory level and firm operating efficiency on dividends in an emerging market

Stable regular dividends can deliver the steady operation of a firm’s performance to its investors. When firms experience lower efficiency and more negative performance, they affect their cash burden dividends. According conversion cycle theory, quicker inventory turnover could benefit firm, it is significant signal high performance. In real business environment, expectation future production, logistics inflation all managers’ decisions. This paper uses data from Chinese manufacturing companies listed on Shanghai Shenzhen stock exchanges 2017 2020 as sample. The provides empirical causality between turnover, operating indicators, dividend distribution, by applying regression method find relationship indicator distribution findings indicate that consideration be complicated inverse U-shape with Further, state-owned enterprises (SOEs) have different considerations about efficiency. They prefer pay stable dividends, even if are under pressure suffer large inventories. SOEs believe following political guidance meeting social obligations prioritized mission.