The Influence Of Political Connection And Semi-mandatory Dividend Policy On Cash Dividends Of China A-share Listed Companies

Domestic and foreign finance scholars have been working on the subject of dividend policy.The time,the payment method,the willingness and level of payment,and the market reaction brought by the regulatory authorities to launch the dividend policy have been plaguing the vast majority of investment and the company's management.In the developed capital market,the company aims at maximizing the interests of shareholders,and formulates a reasonable cash dividend policy according to its future development of capital needs and profitability.However,in the domestic A-share market,a large number of listed companies with strong profitability,good operating performance,abundant cash flow and no refinancing needs in the short term refused to fulfill their dividend obligations,which led to the interests of investors.damage.In order to strengthen the company's awareness of paying dividends to shareholders,training the long-term investment concept of the healthy capital market,adding new vitality to China's A-share market and promoting the rapid development of China's capital market,the regulatory authorities have successively promulgated a series of dividend policies since 2001..The regulation of the policy is also weak to strong,and today's semi-mandatory dividend policy – linking the refinancing qualification of listed companies to the single cash dividend distribution level.Since the promulgation of these policies,their rationality has been the focus of debate in the practical and academic circles.Therefore,this paper firstly introduces the influence of political connections on the company's cash dividend distribution,and then discusses the rationality of the “semi-mandatory dividend policy” based on the perspective of political connections.This paper takes the 2003-2017 A-share listed company as a sample,and the cash dividend payout rate is the explained variable,introducing policy variables,political connections,profitability,growth,debt-raising ability,shareholding ratio of the top ten shareholders,and company size as the explanatory variables;This paper divide the company into a political group(Control)and a non-political relationship(Treated),using the propensity score matching model for empirical research to draw the following conclusions:First,political connection promote the distribution of cash dividends of listed companies.Political connection can alleviate the financing constraints of enterprises,give enterprises more cash flow that they can control,and increase the distribution of cash dividends of listed companies.Second,the introduction of the semi-mandatory dividend policy(dividend provisions in 2008)has a different regulatory effect on private enterprises and stateowned enterprises.It increased the cash distribution level of companies with high financing constraints(private companies)and reduced the level of cash dividend distribution of companies with low financing constraints(state-owned companies),which proved the exist of the limitations of “regulatory paradox”.Third,for companies with lower financing constraints,political connection promote the impact of semi-mandatory dividend policies on the company's cash dividend distribution;for companies with higher financing constraints,political connection inhibit the impact of semi-mandatory dividend policies on the company's cash dividend distribution.This paper further finds that the "dividends regulations in 2008" can only be restricted to state-owned political affiliates and private non-political affiliates and the effect on private political affiliates is not significant,indicating that semi-mandatory dividends can only be constrained to higher financing constraints and financing constraints and the effect of the company with medium financial constraints is not significant for the lower companies.It is partly explained that the semi-mandatory dividend policy has doubts about the rationality of the practice of refinancing and cash dividend distribution.According to the research conclusions,it is recommended that the regulators stipulate different semi-mandatory dividend ratios according to the degree of financing constraints of listed companies.For non-politically-linked private listed companies that have financing needs and are free to control cash flow,they should not issue cash dividends,but the semi-mandatory dividend policy has imposed a binding effect on such listed companies.Appropriately reduce the cash dividend distribution level of nonpolitically-linked private listed companies or set a special cash dividend distribution ratio for such companies,and set up exclusive channels when necessary,so that policies can better promote the sustainable and healthy enterprises with different financing constraints.development of.