A Study On The Effect Of Private Equity On The Cash Dividend

Dividend policy is closely related to the return on investment of shareholders.Shareholders will inevitably have some impact on them when formulating a dividend policy.The cash dividend is the most common form of dividencd distribution.With the successful launch of GEM in October 2009,private equity investment broadened the exit channel and entered a period of rapid growth,gradually becoming a strong impetus for the growth of innovative small and medium-sized companies.Differing from other investment methods,private equity investment not only provide financial support to the target company,but also intervene to the management of the company,participate in the daily management of the company,to affect the company's decision-making,exert supervision and control effect.In this context,private equity investment as a GEM listed company's special institutional investors and shareholders,whether it will affect the cash dividend distribution of invested companies,the issue deserves further discussion.Based on the theory and literature related to cash dividend and private equity investment,this paper analyzes the impact of private equity investment and the heterogeneity of private equity investment including the proportion of shareholding,the investment deadline,the background and reputation of the institution on the cash dividend distribution.This paper uses the GEM companies listed from 2009 to 2016 as the research sample,then constructs regression model to test the impact of private equity investment on cash dividends distribution in the GEM listed companies.The results show that companies with a background of private equity investment are more willing to pay cash dividends.Further study shows the level of cash dividend payment of listed companies in GEM is also affected by the heterogeneity of private equity investment.Specifically,the larger the proportion of private equity investment,the longer the investment period,the way of joint investment and the high reputation of the institution,the level of cash dividends paid by the GEM companies participating in the investment is even higher.However,the institutional background of private equity investment has no significant effect on the level of payment of cash dividends.Based on the conclusion of the study,this paper puts forward relevant policy recommendations from three aspects including government departments,private equity firms and GEM companies.