A Study On The Relationship Between Chinese Institutional Investors And Cash Dividend Distribution Of The Listed Companies

Institutional investors as a product of the development of market economy development, their investment strategy and investment decision has a huge influence on the securities market. At the same time, in order to cater to the western countries’ advocate of "shareholder activism", institutional investors have been constantly participating in corporate governance in recent decades. Though Chinese institutional investors starts relatively late in China, under the strong support of national policy, they develop rapidly and has been able to guide the direction of the market to a certain extent.Making use of cash dividend as the starting point, the article studies institutional investors investment preferences and the state of participating in the governance of listed companies. First of all, on the basis of introduction on cash dividend distribution theory, the article makes simple analysis of the institutional investors whether taking account of companies’ dividends or not, as well as after holding the impact on the set of share out bonus. At the same time, the article reviews the research literature of related institutional investors classification and the correlation between them. Then this paper states the development process and present situation of institutional investors, and we divide institutional investors into two types: Stable and Transactional.Besides the paper also describes the payment status of cash dividend. At last, we collect the data of non-financial insurance class A shares companies in 2010-2013, which are listed on SSE and SZSE. By using multiple linear regression and Logistics regression, we test the relationship between shareholding by institutional investors and the cash dividend policy of listed companies. The results show that,(1) To compare dividends and share out bonus, the former obviously get the favour of institutional investors holding; And institutional investors have significant incentive effect on the company’s share out bonus levels.(2) Stable institutional investors prefer choosing the listed companies distributing cash dividends, and they won’t purchase the high dividend the stocks in large. But transactional institutional investors do not put the cash dividend distribution as an important factor of ownership choice. If the company paid dividends higher levels, transactional institutional investors will choose to hold this kind of company stock.(3) Stable institutional investors support distributing dividends, but does not support high level of cash dividend. Transactional institutional investors not only support distributing dividends, but also high level of cash dividend,in order to obtain short huge profits.(4) Two types of institutional investors are actively involved in the listed company governance issues. Both of them have affected the cash dividend policy of listed companies, although for different purposes they will have different effects on cash dividend distribution level.