An Empirical Study On The Impact Of Ownership Structure Of Listed Companies On Cash Dividend Policy In China

For a long time, the “One Big Share Alone” is a general phenomenon in our country’s listed companies, and the state-owned shares have the absolute control over the listed companies. In reality, the dividend policy, which is more focused on the serving for controlling shareholders, has some disadvantages, such as the dividend payment is random, the cash dividend policy is not stable and lack of continuity, the dividend payment rate is low, and major shareholders pay excess cash maliciously. The fundamental cause of the irrational dividend policy in our country is the unique dual ownership structure. Shareholders of different types with different benefit goal have different dividend distribution tendency.Since the equity division reform in 2005, equity structure has experienced a lot of changes, including the full circulation of non-tradable shares, the lowering of the proportion of state-owned shares, the increasing of the proportion of institutional investors,which is bound to affect the listed companies’ dividend policy. At the present stage, as a principal form of payments for investors, cash dividend returns is directly affected by the equity structure change. Therefore, to explore how ownership structure affects the cash dividend policy of listed companies at the present stage in our country has very important significance.The innovation of this paper is using the latest financial data of 2010-2014 which is presented after the completion of the reform of non-tradable shares of listed companies in China for empirical research. Through the analysis of the change of equity structure and cash dividend policy, the research has more timeliness and actuality, however existing research mostly uses the data during the reform of non-tradable shares. In addition, this paper not only studies the influence of equity concentration on cash dividend policy after the completion of the reform of non-tradable shares, but also adds the influence of stake held by institutional investors and corporate investors on cash dividend policy, as well as the equity balance degree, which enriches the existing researches. Finally, this paper uses the panel data to build econometric model, which reduces the degree of multicollinearity compared with the cross section data, and makes the analysis more accurate.Based on the former researches on dividend theory, this paper presents the conclusion through the empirical analysis with the consideration of the current situation in our country. At first the thesis introduces the study of dividend theory, and then discusses the empirical research on influence ownership structure of domestic and foreign on cash dividend policy, the next part, by collecting a large number of listed companies’ financial data, analyzes and studies cash dividend policy in our country present situation in recent years, the change of the ownership structure, and how the change influences on cash dividend policy after the reform of non-tradable shares.The findings of this paper are the following: the first one is that the ownership concentration is positively related to the level of cash dividend payment, which means that currently the higher equity concentration in China causes the higher agent cost, and that the big shareholders encroach on the interests of the small and medium-sized shareholders; the second one is that non-state firms pay more dividends than state-owned ones with higher agent cost,and that institutions and corporate ownership is negatively related to the cash dividend payment levels, which shows that with the increase of institutional ownership after reform of non-tradable shares, the checks and balances of the major shareholder reduces its erosion of small and medium-sized shareholders’ interests, and reduces the agency costs; the third finding is that equity balance degree is relatively weak, and the second largest shareholder to fifth largest shareholders can not effectively restrain the first largest shareholder.The checks and balances on cash dividend policy effect is not obvious.