A Study On The Relationship Of Institutional Investros' Shareholding And China's Listed Companies' Cash Dividend Policy

As the reform of non-tradable shares has completed successfully and the great support of government to institutional investors, they are developing rapidly and gradually become the most important capital market participants and playing a more and more important role in the capital market. The paper researches institutional investors' conducts and its influence on the List Company's corporate governance from the angle of cash dividend policyFirst of all, it explains "signals theory", "custom theory", "agency theory" about dividend, analyzing the potential connections between institutional investors and cash dividend policy. Then it reviews the institutional investors' history and the development of List Company's cash dividend policy. At last, it uses the data from 2002 to 2009 to establish a model and had an empirical research. It has got some conclusions and some recommendations of the relevant policy has suggested.Main conclusions:(1)The listed company which distributed cash dividend has got more institutional investors to hold its share than that which didn't distributed cash dividend. The listed company whose share was held by institutional investors distributed more cash dividend than that whose share was held by institutional investors.(2)Whether institutional investors holding shares or not and how many they hold has a great relationship with the list companies' cash dividend policy. It proved that institutional investors prefer to the listed companies which distributed cash dividend, and cash dividend can send a signal.(3) Whether listed company distributed cash dividend or not and how many they distributed has a great relationship with institutional investors holding shares. It proves that the more institutional investors hold shares, the more probability listed company distributes cash dividend, and institutional investors take part in the company's internal governance.(4) Empirical studies indicate that institutional investors in our country didn't participate in the corporate governance before the reform of non-tradable shares; it participated in the corporate governance of the listed company after the reform of non-tradable shares and impelled listed company to distribute the cash dividend.