The Research On The Effect Of Semi-mandatory Dividend Policy On Shareholder Return

For a long time,there has been a “dividend disappearing” phenomenon in domestic and foreign capital markets that the number of listed company that pays dividends is decreasing while overall dividends declines in the market.In response to this phenomenon,Britain,the United States and other countries with better capital markets did not take any measures,only depending on the market automatic adjustment mechanism.However,emerging market countries including China implemented different levels of dividend regulation.Most of them carried out mandatory dividend regulation,which directly linked the cash dividend distribution of listed companies to the profit level,for example,Brazil.As its capital market is still in the “emerging and transitional” phase,China adopted the dividend constraint policy that may be unique in the World.Since 2001,the China Securities Regulatory Commission has adopted several cash dividend monitoring measures and linked the level of cash dividend distribution to the eligibility of refinancing of listed companies.Given the particularity of its legal validity and additional rights,Li Changqing,Wei zhihua and other scholars defined it as “semi-mandatory dividend policy”,which is also widely accepted by the academic community.The introduction of Chinese semi-mandatory dividend policy is due to the serious dividend problem in the capital market.China's capital market started late and developed imperfectly.It is a common phenomenon that the listed companies take financing seriously and disdain distribution,which is widely criticized by small and medium-sized investors.Relevant departments issued and improved this policy in order to increase cash dividend distribution,reasonably protect the interest of shareholders,and increase the flow of funds to capital markets.However,people from academia and industry have different opinions on it.Scholars have studied the the rationality and effectiveness of the policy from various perspectives,such as market reaction,resources distribution,enterprise value,agency and investor protection,and gained rich research results.On the basis of previous research results,this thesis will analyze the rationality and effectiveness of the semi-mandatory dividend policy in restraining the dividend-sharing behavior of Chinese listed real estate companies from the perspective of shareholder returns.The reasons for choosing this research topic are as follows.Firstly,Statistical data showed that the semi-compulsory dividend policy.has played a certain role in improving the level of cash dividend distribution.However,there are still many dividend anomalies in practice.There is no definite conclusion that the policy is an investor protection mechanism,a way to encroach on the interests of small and medium-sized investors,or a way to cater to the preferences of investors,so further research is needed.Secondly,theoretically,“maximizing the interests of shareholders” is the financial goal that the management of listed companies should adhere to.Jiang Yang,the vice chairman of CSRC,also stressed that protecting investor's interest is a common principle on supervisors in different regulatory departments.Consequently,this thesis regards shareholder's return as the fundamental basis to measure the policy effect.Finally,research showed that industry factors and company characteristics have a significant impact on the policy implementation effect,and the policy effect will be different because of different regulatory objectives.Therefore,this thesis chooses real estate industry with good data availability and obvious industry characteristics as the samples,in order to enhance the explanatory power of empirical analysis,and provide reasonable policy recommendations for regulatory practice.In order to demonstrate the impact of semi-mandatory dividend on shareholder returns of listed companies in real estate industry,this thesis chooses relevant data of A-share real estate listed companies in China from 2006 to 2017 to empirically test the impact of the implementation of semi-mandatory dividend policy and the policy differentiation improvement in 2013 on shareholder returns.The results show that the semi-mandatory dividend policy improves the overall level of dividend distribution,but its positive impact on returns of shareholder has not passed the significant test and is not inevitable.However,the implementation of differential semi-mandatory dividend regulation after 2013 has a significant positive impact on shareholders' returns of real estate listed companies.