Research On The Influence Of Institutional Environment On Cash Dividend Policy Of Listed Companies

Dividend policy, as an important way to reward shareholders, is an important part of the development of financial strategy for companies. Dividends may reflect the investment value of a company. While the cash dividend policy is the most common and important form in countries whose stock market is rather mature, which has been a hot issue for scholars at home and abroad. Appropriate dividend policy can pass good information about current business operations and future development trend and establish a good corporate image, which can attract investors for the company long-term and stable development, and improve corporate value ultimately. There are a lot of theoretical and empirical researches about the effect of firm characteristics, ownership structure, industry characteristics and other factors on cash dividends. Overseas research on cash dividend policy focused on the degree of legal protection among the factors of the institutional environment, which is one of the tunneling tools for majority shareholders that transfer the resources of listed companies of minority shareholders. However, broader than the legal system, the institutional environment may significantly affect the company’s dividend behavior.In China, resource endowment, economic development and industrial structure shows different trends. From the perspective of institutional environment, applying data of A-share companies listed on Shanghai and Shenzhen Exchange from2003to2012, this paper reveals the effect of institutional environment in different regions on cash dividend. On the basis of the theory analysis of the institutional environment and cash dividend policy, this paper describes the distribution of cash dividends of listed companies and provincial status. And this paper established logistic model and multiple linear regression model to verify the effect of institutional environmental differences on the willingness and level of cash dividend payment. We hope provide empirical evidence for the study of the impact of institutional environment on financial behavior and some suggestions for managers and investors.The research shows (1) the statistic results of the cash dividends of China’s listed companies state that the overall proportion of the companies who delivered dividends has been increasing and illustrates the significant difference of that proportion between the companies from different provinces.(2)Perfect institutional environment (marketization degree, government interference, finance development and law environment) can improve our willingness and level of cash dividend payment of listed companies significantly, and government interference is the most obvious factor that affects the level of cash dividend payment.(3) Further analysis shows, institutional environment plays a weak role in weakening the occurring of "hostile pay dividends", to some extent, which supports the tunneling hypothesis. Besides, this paper excluded interference of split share structure reform and refinancing motivation of listed companies theoretically.