Ultimate Ownership Structure,Investor Protection And The Corporate Dividend Policy

Dividend policy is about whether the corporation distributes retained earnings,or makes the retained earnings stay in corporation to conduct production activity or to reinvest.Dividend policy concerns the interest of shareholders directly.It can reflect the overall strength of a corporation,give the investors certain information,influence the corporate share price.It also can reflect corporate structure and the level of management.So it is an important scale to know the corporate business performance and the level of govemance.Thus,dividend policy is always an important and hot area in corporate financial research.Then,as La Porta et al(1999)put forward the ultimate structure,it acquires a lot of attentions and researches.Before this topic comes out,agency theory always focus on the conflicts between shareholders and managers;when the theory of ultimate ownership is raised,the research content transfers to research the conflicts of interest between ultimate owners and other investors.Investor protection is a part of the external regulatory mechanisms,it has influences and constraints on the behaviors of ultimate owners.This paper brings in investor protection to explore the relationship of the ultimate ownership structure and dividend policy.Based on the two aspect about the external governance and internal regulation synthetically,to research mutual effect on the corporate dividend policy.This paper applies literature research and empirical research,and uses the unbalanced panel data of listed corporations of A share from the year of 2011 to 2014,the data are used to explore the relationship among the ultimate ownership structure,investor protection and dividend policy of listed corporations.The results of the research show:First,the cash flow rights of the ultimate owners and dividends have a significant positive correlation,which shows ownership has an incentive effect on dividends.Second,the separation of cash flow rights and control rights and dividends have a significant negative correlation,which shows the ultimate owners use dividends to occupy the interest of other investors.Third,the dividends of non-state-owned listed corporations are higher than the dividends of state-owned listed corporations,it reflects that the development of market economy and the specification of stock market have a stronger effect on non-state-owned listed corporations than on state-owned listed corporations;Fourth,investor protection and corporate dividends have a significant positive correlation,which shows that investor protection restrains the ultimate owners'behaviors;Fifth,investor protection has influence on the relationship of the separation of cash flow rights and control rights and dividends;Sixth,investor protection influences the relationship of the ultimate owners' characters and dividends,the promotion of investors protection have greater impact on non-state-owned listed corporations.