The Nature Of Cash Dividend,the Protection Of Minority Shareholders And Corporate Performance

The asymmetric information and serious power gap exist, so the conflict of interest between minority shareholders and large shareholders has been modern corporation principal-agent problem, and the concern of the academic circles has been the protection of minority shareholders. Domestic and foreign scholars generally believe that, when the company protects minority shareholders better, the listing corporation performance will be better also. There is a debate on the influence of the cash dividend policy to protection of minority shareholders and corporate performance.In this paper, I use normative and empirical method to put forward reasonable assumptions and models which based on the relevant literature and theory research. Besides of that, I construct the degree of protection through comprehensive evaluation index system of variance weight method, to study the relationship between cash dividend, the degree to protect minority shareholders and corporate performance.In the process of empirical research, I use related financial indicators of the listing corporation from 2009 to 2012 in Shenzhen stock exchange for descriptive statistics, correlation analysis and regression analysis. I draw the following conclusion. Firstly, the firms that pay cash dividends protect minority shareholders better than those don’t pay cash dividends. Secondly, strengthening the degree to protect minority shareholders can significantly improve listing corporation’s performance, and state-owned enterprises’ operating performance is better than the non-state owned enterprises. Lastly, when the ratio of cash dividend payout is low, raising payments of cash dividend can strengthen the degree of protection of minority shareholders, and company performance will be improved significantly also. But when the cash dividend payout ratio reaches a critical point, then improving the dividend intensity will make the degree of protecting minority shareholders decreased, and then reducing the company’s performance.Through the conclusion, I think that the laws of protection of minority shareholders should be improved; the ownership structure should be dispersed and equity balance degree should be improved, strengthening the degree of protecting minority shareholders through all aspects; the Securities and Futures Commission should set the minimum cash dividend payout ratio in accordance with the industry through the form of legislation. The listing corporation can change the actual cash dividend payout ratio, according to the actual profit situation of the year, but the Securities and Futures Commission must agree with that; the listing corporation should be forced to disclose the cash dividend policy and retained earnings for specific purposes.