The Influence Of Equity Incentive On Cash Dividend Dis Tribution In Listed Companies

The typical characteristic of modern companies is the separation of ownership and management,but this separation also causes the principal-agent problem of shareholders and executives.As a mechanism to coordinate shareholders and management,equity incentive plays a more and more important role.However,compared with the United States and other western countries,China's equity incentive system started late,the development of equity incentive in China is lagging behind,and China's equity incentive should to be further developed and improved.Dividend policy is a choice made between short-term dividend and long-term development of a company,it also affects the shareholders' earnings and the longterm healthy development of enterprises and the securities market.Therefore,it is also a hot topic of scholars' research.There are many researches on equity incentive and cash dividend at home and abroad,which can be roughly divided into three aspects: the influencing factors of equity incentive,the influencing factors of cash dividend and the relationship between equity incentive and cash dividend.This paper studies the equity incentive effect on cash dividend.Due to the significant difference between listed companies with equity incentive and listed companies without equity incentive in such aspects as its characteristics and the internal governance,the control group and experimental group can not directly compare.They need to eliminate the difference to compare,so we can obtain the the actual effect of equity incentive on cash dividends;In addition,there are many factors that can influence the company whether the implementation of equity incentive,such as company size,profitability,free cash flow situation,growth,debt level,and many factors such as internal governance.In the case of more individual characteristic variables,using general methods couldn't choose the ideal control group and experimental group to compare.Combining these two cases,we choose the propensity score matching method to solve the sample selection bias.The empirical part of this paper is based on the data of 2671 listed companies in the A-share market on January 1,2014,solstice December 31,2017.After preliminary screening,a total of 9082 samples were obtained.The samples of listed companies with equity incentive were taken as the treatment group,and the samples of listed companies without equity incentive were taken as the control group.There are 2037 samples with equity incentive were obtained,and 7045 samples without equity incentive were obtained.The logit model was used to calculate propensity scores for the treatment group and control groups.According to the propensity score,three matching methods,namely nearest neighbor matching,radius matching and kernel density matching,were used to calculate the average treatment effect of the treatment group(ATT),so as to obtain the influence of the equity incentive implemented by listed companies on the level of cash dividend payment.Data processing is done through stata13.The empirical results show that compared with the listed companies without equity incentive,the listed companies with equity incentive will reduce the level of cash dividend payment.In addition,the results of propensity score matching model were compared with the results of multiple linear regression model,and the results showed that the use of multiple linear regression would underestimate the inhibitory effect of equity incentive on the level of cash dividend payment.The reason for the underestimation lies in that the multiple linear regression model does not eliminate the difference of variables between the treatment group and the control group,but the propensity score matching model eliminates the difference of variables between the treatment group and the control group,so as to obtain the actual inhibitory effect of equity incentive on the level of cash dividend payment of listed companies.As an important behavior to reward investors and maintain the stability of the stock market,cash dividend has been paid close attention and advocated by the government and investors.The empirical results show that the implementation of equity incentive by listed companies will reduce the level of cash dividend payment,and the cash dividend policy is easy to be manipulated by the management,which becomes a means for the management to seek personal gains.Therefore,the regulatory authorities should further improve the relevant laws and regulations on equity incentive,so as to prevent equity incentive from becoming the channel of interest transmission.Strengthen the supervision of cash dividend payment,increase the intensity of information disclosure,so that the formulation of dividend policy,especially the formulation of cash dividend policy has rules to follow,and to prevent unreasonable cash dividend payment.