Research On The Influence Of The Institutional Investors’ Preference For Cash Dividend Policy Of Listed Companies

Reasonable dividend policies, realizing the maximum value, can provide financialsupport for the enterprises. Investors usually have different preference on differentdividend polices. They would like to invest in the listed companies which they prefer.Therefore, there is no doubt that it would attract more investors, if the managerial peopleare able to make suitable dividend polices. However, the point is if the managerial peoplecan fit the preference of the investors, currently, there are various conclusions among thescholars. This thesis, applying the Catering Theory of Dividends, is to analyze theinfluence of the institutional investors’ preference for cash dividend policies.First of all, reviewed the research findings of the influence which catering theory andinstitutional investors are made on cash dividends, found the disadvantages previously,this paper defined the concept of institutional investors, investor preferences and dividendpolicy, and focused on elaborating the theory basis, introduced the current development,the behavior characters of institutional investors and the current situation of listcompanies’ cash dividends distribution, as well as the existing problems, within ourcountry. Then, analyzed whether the institutional investors preferred to cash dividends,and the managerial people were making the relevant dividend polices in accordance withthe preference, this thesis also found out a positive correlation between the cash dividendpolicies of the listed companies and the shareholding ratio of the institutional investors byusing the empirical approach, which proved that the institutional investor indeed prefer tothe cash dividends. What’s more, the dividend polices made by the managerial people,corresponded to this preference. And this approved the dividend catering assumptionwhich mentioned at the beginning. Finally, by means of analyzing the empirical results,here put forward the targeted advise and countermeasure.On the one hand, this paper fulfills the application of the Catering Theory ofDividends in China and makes up of the deficiencies in previous researches. On the otherhand, it could be referred by the managerial people, when making the dividend policies forthe institutional investors and guides people to pay more attention on the dividendpreference of institutional investors, attract more institutional investors to invest.