Controlling Shareholders' Share Pledge And Cash Dividends Policy

As an emerging financing method,share pledge has developed rapidly,and the controlling shareholders' share pledge of listed companies has become very popular in china capital market.According to statistics,by the end of 2018,nearly 50% of the controlling shareholders of listed companies have carried out share pledge financing.In recent years,due to various internal and external factors,the capital market has been declining,and the risk of share pledge has once again been at the forefront,causing market parties to pay attention.The share pledge is not only the financing behavior of the controlling shareholder,but also has an important influence on the listed company controlled by them because of the particularity of the equity collateral.For example,the controlling shareholders' share pledge increases the agency conflict,which has negative effects on the value,earnings management and innovation of listed companies.Cash dividend policy is an important financial policy of listed companies.Cash dividend is an important way for investors to obtain returns.This paper investigates the connection between the share pledge and the cash dividend policy of the listed company.This paper first makes a analysis of the background and development status of the controlling shareholder's share pledge,then,the paper has listed companies in 2014-2018 as the initial sample,based on the principal agent theory,the consequence of share pledge,this paper discusses the impact of share pledge on cash dividend policy of controlling shareholders,also analyzes the influence of the relationship under the background of benefits expropriation and the governance of external audit.The main conclusions are as follows:(1)the controll shareholders share pledge,the cash dividend level will be decreased,the higher the ratio of share pledge,the lower the distribution level of cash dividend.(2)By adding the factors of shareholder benefits expropriation,it is found that the more serious the agent conflict and the more serious the controlling shareholder's benefits expropriation,the more significant the negative correlation between the shareholder's share pledge and the cash dividend distribution.(3)Compared with companies with high audit quality,the negative connection between pledge of controll shareholder and cash dividend distribution is more obvious in low audit quality audit.Based on the above conclusions,this paper puts forward suggestions to improve the share pledge system,cash dividend distribution system,strengthen the supervision of external audit,and strengthen investor education and protection.