Study On Irrational Cash Dividend And Tunneling Behavior

In the early stage of China's capital market,the system construction was not healthy.Since 2008,in order to protect the interests of shareholders,the government has introduced a series of policies to promote listed companies to carry out cash dividends and set a lower limit for refinancing dividends,giving investors immediate benefits."Iron roosters" gradually reduce,but the high cash dividend quietly appears.The high cash dividend on the market can be divided into two categories: rational cash dividend and irrational cash dividend.Rational cash dividend can not only bring benefits to investors,but also can beautify the companies,improving the value of the companies.However,the irrational cash dividend will often expose the bad motives of the management or major shareholders,such as the motivation of interest transmission,which will not only damage the interests of many small and medium-sized shareholders,but also make investors give up investment because they feel cheated,and the company's reputation will be damaged.As the government cracks down on "high delivery",the attitude of encouraging cash dividend is gradually clear,more listed companies invest in cash dividend,and there are a large number of irrational cash dividend events that may have the motivation of interest transmission.Irrational cash dividend and tunneling behaviors begin to be widely concerned by the capital market and academia.However,the current literature still focuses on the motivation of high cash dividend and economic consequences or the motivation of tunneling in private placement.Few scholars have associated irrational cash dividend with tunneling behaviors and tried to think about the underlying motivation and possible economic consequences.The innovation of this paper lies in the correlation between the irrational cash dividend and tunneling behaviors,the discussion of the reasons behind,which enrich relevant literature on the irrational cash dividend and dividend policy.At the same time,the paper will explore the possible economic consequences of this behavior,which can be reference value to major shareholders,listed companies,investors and national regulators.Based on the principal-agent theory,the signal transmission theory and the tunneling effect theory as the theoretical basis,the paper combines a large number of domestic or overseas literature research results,discusses the irrational cash dividends of listed companies from the perspective of the tunneling behaviors and set Yinyi Co.,Ltd as an example to deeply study the signs of irrational cash dividends,the reasons and the economic consequences.The results show that the over-concentration of equity structure,the lack of liquidity of major shareholders and the unsound external supervision mechanism will lead to the "tunneling" type of irrational cash dividend.Such irrational cash dividend may bring negative impact on the company's financial performance,and also increase the company's debt and capital chain risk.Facing these research results,this paper puts forward countermeasures and suggestions from the perspectives of the company's internal,investors and the national regulators,hoping to give certain warnings to other companies,investors and regulators in the capital market through the "tunneling" type of irrational cash dividend event of Yinyi Co.,Ltd,so as to promote the improvement of the capital market.