Political Connections,Financial Constraints And Cash Dividend Distribution

As one of the three major financial policies in the field of corporate finance,the dividend policy is a continuation of the company's investment and financing behavior,and an important channel for investors to obtain income.A scientific and reasonable dividend policy can not only satisfy the needs of investors to obtain returns,but also help the company to establish a good corporate image.In view of the importance of the dividend policy,Chinese and Western scholars have worked tirelessly for decades to study the factors affecting dividend policy and have given their views from different angles.To study the influencing factors of the dividend policy,we must consider not only the investors' demands,but also the characteristics of the dividend policy makers.At this stage,China's capital market development is still not perfect,financial development is not balanced enough,and the rule of law is relatively slow.The government's "tangible hand" plays a decisive role in market economic activities.Under such a system background,Chinese entrepreneurs seek political connections through various means in order to obtain resource allocation benefits,which has become a common phenomenon in the market,and political connections have become an important characteristic of business development.Political connection is a kind of social capital of private entrepreneurs.It is also an important value resource for enterprise development.Such resources have an important impact on the daily business behavior of enterprises,especially the allocation of funds.Therefore,it is necessary to explore political connections.Relationship with corporate profit distribution behavior.However,the existing literature research in this area is not rich,and the existing literature does not reveal the influence mechanism of political association on cash dividend distribution.Therefore,this paper will use political association and cash dividend distribution as the research direction of this paper.At the same time,explore the mechanism of the influence of political connections on cash dividend distribution.The existing literature demonstrates that the political association of private entrepreneurs can alleviate the financing dilemma by reducing the information asymmetry of enterprises in the financial market.The literature also demonstrates that political connections can provide financing convenience for enterprises in the form of rent-seeking.Such as reducing financing costs,extending the loan period,and so on.Past research has also proved that the mitigation of financing constraints can reduce the occupation of internal cash flow,thereby increasing the distribution of cash dividends.Based on this,this paper introduces financing constraints as a mediator variable to explore the impact of political connections on cash dividend distribution and its impact mechanism.On the basis of the measurement of variables,this paper introduces the executive weights to weight the independent political associations based on the previous research.To avoid the endogeneity problem,this paper selects the SA index to measure the financing constraints,in the main regression and robustness test.In the middle,the cash dividend distribution is measured by indicators such as cash dividend per share,dividend distribution ratio and dividend yield.In the choice of empirical methods,this paper adopts the causal stepwise analysis method widely used in the academic field in the main regression part,and adopts the method of double difference and Bootstrap in the robustness test part.Based on the above logic,this paper takes China's GEM listed companies as the research sample,selects the annual data of listed companies from December 31,2009 to December 31,2017,theoretically analyzes and empirically studies the impact of political connections on cash dividend distribution.And the channel mechanism of its impact.Through the empirical study of constructing regression models,it is found that political association can affect the distribution of cash dividends.The greater the intensity of political connections,the more cash dividends are distributed.The financing constraints play an intermediary role in the relationship between political connections and cash dividends,that is,political correlation.Mitigating financing constraints,and the mitigation of financing constraints has increased the number of cash dividends issued;the role of political connections is more obvious before the 18th National Congress against corruption,and was weakened after the 18th National Congress,indicating that political connections are an informal mechanism and Corruption related.This paper studies the influence of political connections on cash dividend distribution and its impact mechanism,enriches the research on corporate governance and corporate dividend policy,and provides a new perspective for studying political connections and corporate financing and distribution behaviors.As an informal system,association is closely related to corruption.Therefore,it provides ideas for the regulatory authorities to regulate the relationship between government and enterprises and avoid power rent-seeking.