The Impact Of Family Control On Cash Dividend Policies

In recent years, some foreign scholars found that listed companies were ultimately controlled by the family in many countries. Although state-owned listed companies accounts a large proportion in China, the number of family-controlled listed companies are growing year by year and they are playing an increasingly important role in the operation of market economy. Dividend policy is one of the company's important financial policies, also it is an important part which balanced the interests of the ultimate controller and small shareholders. There are a lot of factors that affect listed company's cash dividend policy, but recently most family-controlled listed companies have ultimate controller, and they separated their cash flow right and control right by made use of the pyramidal ownership structure, also they prefer to make cash dividend policy on the basis of how to maximize their own interests. Therefore, the study of the impact of family-controlled listed company's ultimate controller on cash dividend policy in the pyramidal ownership structure has a strong theoretical and practical significance.On the basis of summarizing the previous research literature, this paper firstly introduced the theoretical knowledge about ultimate controller and dividend policy, and then describe the current situation of ultimate controller's characteristics and cash dividend policy in family-controlled listed companies; then choose 1411 family-controlled listed companies as the data sample for five consecutive years between 2004 to 2008 to study this subject.Empirical part of this paper is mainly divided into two parts:the first part, using Logistic regression and multiple linear regression to analyse the impact of ultimate controller's characteristics on cash dividend distribution trends and degree respectively. The second part which contains two aspects, not only conducting robust testing of the regression results in the first part in order to enhance the reliability of conclusions, but also taking account of the impact of the reform of non-tradable shares on the content.The results of this thesis are:1.The more the ultimate controller's cash flow rights are, the less the ratio of cash flow right to control right is, the more the cash dividend distribution trends and degree are; 2.Compared to the non-founding family listed companies, the cash dividend distribution trends and degree are greater of the founding family-controlled listed companies; 3.Compared to those family listed companies which ultimate controller don't act as manager, these family listed companies which ultimate controller act as manager tend to distribute more cash dividends; 4.Afer the reform of non-tradable shares, ultimate controller of family listed companies have less incentive to encroach the interests of the minority shareholders. Finally, this article put forward some political recommendations form optimal the structure of control right, strengthening supervision, improving information disclosure system of the ultimate controller and improving the system of independent directors.