The Influence Of Power Balance With Shareholder Structure On The Dividend Policy In The Listed Companies Of Our Country

Dividend is a form of distribution to shareholders.The company made a net profit from operations and take part of the profit to distribute to the shareholders. Since the term "dividend" emerged, it becomes the focus, it is an indicator of a company's growth and development. Reasonable dividend policy can not only meet the needs of shareholders, but can also provide cheap sources of funding to support the development of enterprises, and can also attract potential investors and creditors. In the west countries, especially in Britain and USA, the main agency problem exists between managers and shareholders, dividends can solve this problem. But in China, things are different. The stock market is not mature, the dividend policy of companies is not stable, which are inconsistent with the classical theory of dividends. The reason is that China's listed companies are generally highly concentrated, "dominance" phenomenon is particularly serious, major shareholders, especially the first major shareholders can control over the enterprise, which stimulate them to use various means for their own personal gain, causing many companies to issue too high cash dividends, which infringes on the interests of small shareholders. Therefore, in our country, the main agency problem is not the confliction between managers and shareholders, but between large shareholders and small shareholders.Sub-owned shares is the phenomenon that the listed companies issue both unlimited shares which can traded public in Stock Exchange and limited shares which are temporarily not allowed to trade public. The phenomenon is uniquely existed in the Mainland of china. The acquisition cost of limited shares is far lower than unlimited shares, but the rights of shareholders are the same. In addition, the shareholders of limited shares can not obtain capital gains through normal market transactions. Therefore, the large shareholders of companies have strong incentive to profit themselves by paying high dividend. This is called the "tunnel effect". Power balance with shareholder structure, means that the major shareholders of the company establish a supervision mechanism through the company's internal interests of restraint, which is in order to achieve the goal of mutual supervision. In addition to the largest shareholder, the other major shareholders are also likely to impact on the company's financial decisions. When these shareholders have certain shares which can threat the largest shareholders, they will choose to monitor and restrict the behavior of the largest shareholders to form the power balance to the largest shareholders. In addition to the first-largest shareholders, the second-largest shareholders are the largest shareholders of the company, they definitely can make the biggest constrains to the first-largest shareholders. In addition, several large shareholders may also form alliances to monitor and restrict the first-largest shareholders. People generally believe that power balance with shareholder structure can constrict the behavior of the first-largest shareholders to a certain extent, which play an important role in safeguarding the interests of small shareholders.In this paper, we focus on the "tunnel effect" of large shareholders which exists in China listed companies, to see how the power balance with shareholder structure affect the dividend policy of the companies. In addition, we also focus on the reform of non-tradable shares, to see how the reform of non-tradable shares affect the power balance with shareholder structure and the dividend policy of the companies. In the first part of the article, we review the western classic theory of dividend policy, then through descriptive statistics, generally describe the status of dividend distribution and share balance of China listed companies. Next, by way of empirical analysis, we analyze how the share balance affect on the dividend policy, to see whether the balance of the second-largest shareholders and the joint of several large shareholders can inhibit the predatory behavior of the first-largest shareholders. We also analyze the different affection of the reform of non-tradable shares, which is to explore the effective of the reform of non-tradable shares. Finally, based on the empirical results, we make some recommendations.