A Research on Internal Control, Cash Dividends and Enterprise Performance Based on Economic Consequences


Yilin Wang, Lei Ruan




Whether internal control and cash dividend will have an interactive synergetic effect on enterprise performance or not is a study of both theoretical value and practical significance. Consequently, this article adopts a two-stage investment decision research process, explains the complex theoretical relationship among internal control, cash dividend and enterprise performance and, taking the Chinese A-share motherboard as an example, further explores their interactive synergetic effect. The research concludes that: (1) Internal control and cash dividend can contribute to the improvement of both short-term and longterm enterprise performance; (2) Internal control and cash dividend do have a significant synergetic effect, however there is a large disparity between the synergetic effect on short-term and long-term enterprise performance. In addition, the study finds that internal control and cash dividends are mutually regulative, thereby diminishing the positive impact on short-term enterprise performance and conversely enhancing the positive impact on long-term enterprise performance respectively.