Managerial Power, Equity Expansion And Dividend Policy

Dividend policy as an important financial policy of listed company, has beenunder the attention of people. At present, the dividend policies of listed companies inour country still have many problems, and part of the company’s dividend policies arestill in disorder. Although securities regulators have introduced many policies andregulations, dividend policy of chaos is still not fundamentally contained. To explorethe influence factors of dividend policy has a realistic significance for regulating thestock market and perfecting the corporate governance of listed companies in China.This article is to study the influence factors of dividend policy mainly from twoaspects. The first is the effect of the management power on dividend policy. Since theimplementation of the dividend policy will affect the amount of cash of themanagement control, the management has the motivation to influence the dividendpolicy. The second is the effect of the equity expansion on dividend policy. Becauselisted companies with equity expansion motives may be more inclined to stockdividend distribution. This paper selects listed companies on Shanghai and ShenzhenStock Exchange from the period of2010to2012as samples. This paper measure thesize of management power with the general manager whether it is the chairman, thenumber of directors, the number of the independent director and the level ofmanagerial ownershipof share. And this paper measure equity expansion degree withcompany scale, the listed years of the listed companies, the undistributed profit pershare and capital reserves per share. Then we put forward our research hypothesis,and we further study by descriptive statistical, correlation analysis and regressionanalysis to further examine the assumption. At last, we draw conclusion and putforward suggestions for improving the dividend policy of the listed company in thispaper.Through the empirical analysis, this paper found that the managerial powerdirectly affects the choice of dividend policy of listed companies, and everymeasurement of equity expansion also affects the choice of dividend policy of listed companies. To limit management to meet their own interests and abuse their power toinfluence the dividend policy of listed companies, it is necessary to restrict certainaspects of management power. And for those companies who no longer expand equity,it is necessary to strengthen the enforcement mechanism of cash shares. Only throughstrengthening the requirements of dividends and establishing a good investorsrewarding system, can we promote the healthy and orderly development of stockmarket of our country.