Abstract: Cash dividend is an important way for investors to obtain returns. Ensuring investors′ reasonable returns not only is an important manifestation of the fiduciary duties of shareholders of listed companies，but also is an inherent requirement of the healthy development of capital market. Based on the financial characteristics of listed company, the paper analyzes the relationship between financing constraints, free cash flow and cash dividend policy,and discusses whether the impact of financial characteristics on cash dividend policy under different levels of financial development will change, finding that there is a negative correlation between the financing constraints and the cash dividend policy, and the improvement of the financial development level can significantly alleviate the negative correlation between the corporate financing constraints and the cash dividend policy; free cash flow is positively related to cash dividend policy, but with the improvement of external financial development, this relationship will be significantly weakened. The above research results can be used to correctly understand how financial development plays a role in micro economic variables of enterprises, and then affects company′s financial decisions; at the same time, it has some policy implications for how to overcome the “regulatory paradox” caused by the semi compulsory dividend policy through market means for financing constrained enterprises at present stage.

Key words: cash dividend policy, financing constraints, free cash flow, financial development