Studies On The Cash Dividend Policy Of Local State-owned Listed Companies

State-owned enterprises(SOE)play an indispensable role in China's economy.According to the law,the central government and local government exercise the rights and the obligation as shareholder at different levels and enjoy the corresponding rights and interests of the investors.A considerable number of SOEs has become public listed companies,of which,local state-owned listed companies is an important part.Dividend policy is an important part of state-owned listed companies' financial policies,and it is also an important way for state-owned shareholders to realize their returns.This paper systematically studies the cash dividend policy of local state-owned listed companies and its fundamental causes.The paper finds that the cash dividend policy of state-owned listed companies is more negative than other types of listed companies,due to the impact of over-investment and controlling shareholder's interest expropriation.Under the constraint of limited resources,the local governments take action to influence the investment or expropriate the company's financial resources with the intention to alleviate fiscal pressure,which occupies the resources that the listed companies could have used to pay cash dividend.This paper studies with the logic structure as "cash dividend policy ?local government ultimate controlling shareholder behavior? local government fiscal pressure motive".This study not only expands the academic understanding of the cash dividend policy of state-owned listed companies under the control of local governments,but also provides policy reference to improve the local governments 'power exercise mechanism in the SOEs and the operation budget system of state-owned capital.This dissertation is divided into 9 chapters,the structure is briefly introduced below.The first 2 chapters are the basis of the paper's analysis.Chapter 1 presents the purpose of this paper,defines the research questions,and clarifies the main research content and framework of the research.Chapter 2 analyzes the related theories,and reviews the literature in the field of dividend policy,controlling shareholders' agency problem,and the financial policy of the SOEs.The next 2 chapters analyze the basic situation from the historical and current views.Chapter 3 reviews the history changes of the SOEs profit distribution related system,and analyzes the main problems existing in the current regulations.Chapter 4 analyzes the status of the local state-owned listed companies,focusing on the cash dividends,distribution of cash dividend in different regions and different levels of government-controlled listed companies.Chapter 5 identifies research questions,and proposes research hypotheses.This chapter uses logistic model and tobit model to test the difference of cash dividend payout tendency and payment level between local state-owned listed companies and other types of listed companies respectively.The result proves that local state-owned listed companies are more reluctant to pay cash dividend policy,and dividend is much lower than other types of listed companies.Moreover,this chapter analyzes three hypothetical causes of the negative cash dividend policy and their interconnections,paving the way for empirical research.In Chapter 6 and Chapter 7,this paper tests the over-investment hypothesis,the expropriation hypothesis respectively,to explain the characteristics of cash dividend of local state-owned listed companies.Chapter 6 estimate the overinvestment of listed companies using the Richardson(2006)model and confirms that as the degree of over-investment increases,the level of payment of cash dividends declines.Local government's control will exacerbate over-investment's negative influence on cash dividend payment level.Chapter 7 studies the expropriation hypothesis.The extent of shareholder's expropriation,which is measured by other accounts receivable,prepayment or related guarantee amount,has a negative impact on the tendency of payment of cash dividend and the payment level.This paper further analyzes the over-investmentand expropriation's detriment to shareholders'interests.Chapter 8 further investigates the motivations of local governments' intervention in the local state-owned listed companies.It is found that in the regions with high fiscal pressure,the gap between the tendency and the level of cash dividend is more obvious.This chapter confirms that local financial pressure is the most fundamental cause of negative cash dividends of local state-owned listed companies.Financial pressure exacerbates the over-investment and the expropriation's suppression of cash dividends.In addition,the sensitivity analysis of the financial pressure based on the local government debt data also draws the same conclusion.Chapter 9 summarizes the conclusions of the dissertation,and puts forward some policy suggestions.Finally,I point out the limitations of this study and follow-up research direction.The possible contribution of this paper mainly includes the following points:First,this paper studies the impact of government control on the cash dividend policy of local state-owned listed companies in the specific institutiongal background,which expands the academic understanding of ownership's influence on the dividend policy.Second,this paper constructs the mathematical model on the impact of over-investment and the controlling shareholder's expropriation on the cash dividend,and corroborates the empirical analysis.The article embraces dividend policy into the overall financial decision of the enterprise,and analyzes the influence of the controlling shareholder's behavior on the dividend policy of the SOEs.Under the constraints of limited resources,overinvestment and shareholder expropriation will distort cash dividend policy.Third,this paper analyzes the multi-level principal-agent problem in the local state-owned listed companies,and contributes to the study of the local government intervention mechanism.Fiscal pressure has become the motive for government shareholders to acquire private benefit.Local governments are more likely to intervene in local state-owned listed companies when they are under great fiscal pressure,which will hurt the interests of minor shareholders and reduce the resources available for dividend distribution.Fourth,the micro-level research reveals the internal causes of the lack of state-owned capital gains at the macro level.The SOEs' profit payment level still needs to be improved.First of all,the government's intervention in corporate financial resources needs to be regulated.The statistics of this paper will help the fiscal sector to grasp the assets of the local state-owned listed companies,lay the foundation to improve the state-owned asset management,and embed the listed company's cash dividend into the state-owned capital proceeds.