The Empirical Analysis About The Dividend Policy Of Listed Company

Dividend distribution is a behavior that a listed company distributes the realized profits to shareholders as a return to the investment. The choice of dividend policy is the important part of the financial decision. How to choose a dividend distribution policy will be related to the benefits of shareholders, managers, creditors and the company. In fact, It is essentially the result of unceasing negotiations between different interest parties. Dividend policy has been always the focus of the concern of scholars, academic Black call it as "the mystery of dividends". Reasonable dividend policy will help establish a good market image and guide investors to invest efficiently, protect the capital market in an orderly manner.Compared to the mature markets in the west, Chinese security market has its own unique characteristics. Chinese Listed Companies have the weak sense of return to shareholders, they always pay a lower level and the dividend policies also lack of planning and stability. The reasons are complex r, one of which is the equity structure, shareholding structure determines the governance structure of listed companies, it is the nature of the various interests of the Shareholders as a symbol of power. When different parties negotiate for their benefits, it will produce different preferences for the distribution of profits, which determines how to choose the dividend policy of the company.Scholars have different opinion on the ways how the ownership structure of a company influences its dividend distribution policy. The Western classical theory may not be fully applicable to the of China’s listed companies. This paper summarizes previous theory and research on the basis of the literature. Based on Chinese unique security market, we focus on the analysis of the ownership structure of listed companies and its dividend policy. At first, we introduce the situation of Chinese companies’shareholding structure and dividend distribution using descriptive statistical methods. We can found that over the past decade, the listed company’s dividend payment has been steadily growing, and the proportion of listed companies who pay the dividend also increased. But the main problem of Chinese companies is the dividend yield is too low and the decision making is casual and lace of continuity,which has a great relationship to the ownership structure of a company. The level of the ownership concentration is high and proportion of the state-owned shareholders in Chinese company is large. Even after the equity split reform, the situation of ownership structure has been greatly improved, but the balance and diversity of ownership structure is far away from standards.In the empirical analysis, we use a multiple linear regression method, by setting the proportion of state-owned shares, the proportion of tradable shares, ownership concentration, equity balance degree, the proportion of institutional investors and other explanatory variables, focusing on influence of these variables for the dividend distribution policy. Empirical results show that ownership concentration has a significant positive correlation to dividend payment, which matches’tunnel theory’ that the controlling shareholder of companies use low cost cash dividends that are protected by law way to transfer funds to meet their own interests The results also found that in Chinese market investment atmosphere, institutional investors haven’t play the role and their focus does not lie in their payment of dividends but capital gains and speculative acquisition. Finally, on the basis of the empirical results, this paper presents how to improve the ownership structure of companies and dividend distribution policy.