Refinancing Demand,Cash Dividend And Protection Of Small And Medium Investors' Interests

Small and medium investors are the most important participants in the stock market,and it is an important force to ensure the operation and development of the securities market.The level of interest protection of small and medium investors is the key factor that affects or even determines the development level of the securities market in a country or region.Dividend,especially cash dividend,is the main way for investors to get the return of investment in the stock market.However,China's capital market is full of speculative,and the cash dividends of Listed Companies in China have been at a low level.Since 2001,China Securities Regulatory Commission issued a series of normative behavior of listed companies dividend policy documents,the qualification for refinancing linked with the level of cash dividends,In 2006,The regulation department stipulates that the public equity refinancing of listed companies is based on the fact that the total profit allocated by cash or stock in recent 3 years is no less than 20% of the annual profit that has been realized in the recent 3 years,and the proportion increased to 30% in 2008,and only the cash dividend as the calculation standard,in order to improve the dividend status of listed companies and protect the interests of small and medium investors.The policy can only impose mandatory constraints on publicly listed companies that need to be publicly refinancing,but has no binding force on companies that have no demand for publicly traded equity financing.Therefore,the academic circles define it as a semi compulsory dividend policy.Supervision departments to formulate the policy is designed to protect the interests of investors,promote the healthy and continuous development of stock market,however,these policies attracted controversy of the academic and practical circles.In recent years,scholars have studied the market effect of semi-mandatory dividend policy,they found that after the implementation of semi mandatory dividend policy,dividends and willingness to pay dividends of listed companies have been improved,but they will have a negative impact on listed companies,and whether they can protect investors' interests is also worth exploring.Under the background of China's special dividend regulation policy,after combing the relevant literature,this paper analyzes the relationship between refinancing demand,cash dividends and the protection of small and medium investors' interests by using agency theory,pecking order theory and signal transmission theory.This paper applies normative analysis and empirical analysis method,and selects A share listed companies with cash dividends from 2008 to 2016 in Shanghai and Shenzhen two cities as research samples.In this paper,we use multivariate regression model to empirically study the relationship between refinancing demand,cash dividends and the protection of small and medium investors,and the relationship between the demand for refinancing,the cash dividend and the protection of the interests of small and medium investors under different debt financing constraints.This paper further grouped according to the growth of listed companies and the degree of competition in the industry of Sample Firms,explores in different growth or the degree of competition in the industry of the listed company,its refinancing needs influence on the relationship between cash dividend and protect the interests of small investors difference.The conclusions of this paper are as follows,(1)The distribution of cash dividends is beneficial to the protection of the interests of small and medium investors.The distribution of cash dividends can reduce the free cash flow in the enterprise and weaken the interests of the controlling shareholders and the overinvestment of the managers.Therefore,the dividend distribution can reduce the agency cost and protect the interests of the small and medium investors.(2)In the semi mandatory dividend policy background,listed companies refinancing needs will weaken the relationship between cash dividend and the protection of small investors.The refinancing demand will aggravate the motivation of enterprises to cater to the dividend,which leads to the blind dividends of the enterprises regardless of their own dividend ability,thus weakening the protection of the small and medium investors.(3)The stronger the debt financing constraints,the stronger the weakening effect of the refinancing demand to the protection of the interests of the small and medium investors.The external financing channels of the listed companies mainly include debt financing and equity financing,When the debt financing constraints of listed companies face more strong,more difficult to obtain debt financing,the more motivation for access to public equity refinancing qualifications to meet regulatory policy dividends,thus ignoring their own financial situation,influence the development of the company,to the detriment of the interests of small and medium-sized investors.(4)Semi mandatory dividend policy has a negative impact on high growth and highly competitive listed companies,and its refinancing demand will weaken the protection effect of cash dividends on small and medium-sized investors.However,for the low growth and low competitive listed companies,because of the less opportunity of external investment,it is less likely to choose the dividend regulation policy by sending cash,and the controlling shareholders prefer to alleviate the agency problem with the management.According to the theoretical and empirical results of this paper,the proposed policy recommendations are as follows,(1)From the perspective of government regulation policy,The government regulatory authorities should formulate relevant regulatory policies according to the specific circumstances of listed companies,and the regulatory authorities should take some measures to supervise the implementation of cash dividends of listed companies,so as to ensure the protection of investors' interests.(2)From the angle of listed company,Listed companies should strengthen their management and actively disclose their related financial information.In addition,listed companies should actively fulfill their dividend commitments and disclose their dividend information publicly,so that small and medium investors can get tangible returns.(3)From the perspective of small investors themselves,Small and medium-sized investors should actively improve their financial knowledge reserves,pay close attention to their long-term interests,and make use of knowledge reserves and professional judgement of relevant professionals,such as institutional investors,to safeguard their interests.