Pyramid Structure To Research On The Effects Of Cash Dividend Policy Of Listed Companies

Since La Porta raised the concept of ultimate control in1999, scholars find the main conflict of corporate governance is not the one between managers and owners, but the one between inner controlling shareholders and small shareholders except the common law countries like UK and USA. The inner controllers are controlled by the ultimate controlling shareholders. The concealment and complexity make it possible for the ultimate controlling shareholders to maximize their own interests, which may hurt the interests of small shareholders. Listed companies are usually controlled by the ultimate controlling shareholders through the pyramid structure in China. And cash dividend policy is the result of games among interest-related subjects in the general meeting of shareholders. Therefore, the cash dividend policy and ownership structure are related. By tracing back to the ultimate controlling shareholders, this paper considers the influence of pyramid structure’s five aspects on the cash dividend policy, which are the nature of ultimate controlling shareholders, cash flow right, control right, separating degrees of two rights, and the complexity of pyramid structure.In order to study the influence of pyramid structure’s aspects on the cash dividend policy, the thesis takes715listed companies from2004to2010as samples, building panel data models to do the empirical research. The results show that:the nature property right of the ultimate controller has a significant negative correlation with cash dividend payout tendency. Group properties of the ultimate controller have a significant negative correlation with cash dividend payout tendency. Both the control rights and cash flow rights of the ultimate controller have a significant positive correlation with cash dividend payout tendency and payout effort; the separation ownership of the ultimate controller is positively correlated with cash dividend payout tendency; the complexity of pyramid structure is negatively correlated with cash dividend payout tendency and payout effort.