The Research About The Effect Of The Share Splitting Reform On The Cash Dividend Distribution

The shareholding splitting is an outcome of China's transition from the planned economy system to the socialist market economy with Chinese characteristics under specific historical conditions.Despite that there's certain rationality under given historical conditions,the disadvantage was still gradually revealed because of the unreasonable design of the inherent system with the constant improvement of the socialist market economy and perfection of the legal system.In order to eliminate the disadvantage,and further improve the socialist market economic system,Chinese government finally initiated a split-share structure reform in April,2005 after experiencing a series of attempts and finallyThe split share structure reform is to carry out the accounting of shareholding cost for the non-public stockholders and public stockholders and to reconfirm the stock equity of the two kinds of stockholders by changing the non-public shares to public shares so as to actually realize the same share with equal rights.The share structure reform aims to establish the foundation of the standardized market system and remove the long-term institutional root cause which has affected the interests of the public-shareholders from an institutional level.It will ultimately improve the corporate governance structure of the listed companies,eliminate the non-public shareholders' monopoly control rights given by the system and avoid the continuation of the same share with different rights and the same share with different interests.In Aril,2005,the share splitting reform was initiated in China and each reform measure was in full swing.So far,the split share structure reform has been close to the end.From a microscopic level,the split share structure reform will improve the corporate governance structure and capital operation mechanism.However,on the whole,it will improve the quality of the listed company and enhance the shareholding confidence of the social public corporate shareholders.From a macroscopic level,it will exclude the difference of the circulation system between the non-circulation shares and circulation shares and strengthen the function of market restraint on the behaviors of the listed companies;Meanwhile,in certain extent,it will also restore the price discovering function of the capital market,create conditions for fully developing the functions of the capital market and promote the fundamental reform of the stock market so as to effectively enhance the confidence of the investors.The share splitting reform is a reform oriented to the basic system of the market and operation mechanism,with its significance represented not only in settlement of the historic problems but also the creation of the conditions for other reforms and institutional innovation of the capital market.Taking the good opportunity of the split share structure reform,this paper integrates the current theoretical development trend and points out the effect of split share structure reform on cash dividend distribution on the basis of the previous researches.Then,with such effect by taking the equity structure as the connection point,the paper deeply analyzes the changes of the cash dividend policy lay by lay.To begin with,this paper puts forward the issue,purpose and meaning needed for research from a view of the historical background and reviews the relevant theories of the cash dividend policy and split share structure reform on the basis of assimilating and integrating the related literature.Then,this paper goes on with the theoretical analysis of the effect of the split share structure reform on the cash dividend distribution and further analyses the effect of the split share structure reform on the cash dividend distribution in view of both ownership structure and the internal and external corporate governance by focusing on the existing characteristics of the cash dividends of the listed companies before the split share structure reform and on the premise of the effect of the share structure reform on the share structure and corporate governance.Moreover,by analyzing the changes of the cash dividends before and after the split share structure reform from a quantitative view,this paper begins with descriptive statistics,with the statistic results shown as follows:Because of the split share structure reform,the holding ratio of the largest shareholder has been greatly decreased with the significantly increasing negotiable share ratio.The share structure reform has helped to improve the continuously existing problems about the dual structure of the tradable shares and non-tradable shares and the special ownership structure of" one share big alone".Meanwhile,the share structure reform has boosted the optimization of the equity structure.It has also been found that the cash dividend distribution of the listed companies was abnormal during the year of implementing the split share structure reform and inconsistent with the integral change law of the stock dividends.It proves that the big shareholders have realized the threats to their stock holding positions due to the split share structure reform.The split share structure reform will help the cash dividend policy represent the interests of most shareholders.Therefore,they intended to operate the dividend policy by taking the last chance so as to advance their own private interests;after the share structure reform,the big shareholders have acted rationally and the non-distribution of the cash dividend and abnormal school has been decreased Then, by taking the cash dividend per share as the dependent variable and the equity structure and corporate governance as the independent variables,regression analysis was carried out,with regression results shown as follows:After the split share structure reform,the ownership concentration and the first shareholder's share ratio have been decreased;the ratio of the circulation shares have been on an increase and the relatively biggest shareholder among other major shareholders has had stronger ability of checks and balances.However,the equity structure and equity balance-and-check variables which affect the cash dividend policy of the listed companies have got no change.The short-term effect of the split share structure reform on the cash dividend distribution has not been fully played.At last,on the basis of the theoretical and empirical analysis,this paper has drawn a research conclusion and raised the policy suggestions in view of the conclusion and future issues needed for attention as well as the existent insufficiency during the research process and future development direction proposed so that it has provided a certain reference value to the relevant researches in the future.