Lifting Of Short Selling Constraints And Cash Dividend Policy

In order to promote the healthy development of the capital market and improve the capital market trading system,China securities regulatory commission began to lift the short selling restrictions in March 2010.The lifting of short selling restrictions ended the history of "unilateral market" in China's stock market for more than 20 years.This is a breakthrough reform in China's stock market trading system.The rapid development of the margin trading in China also makes it particularly important to recognize the impact of the short selling mechanism on the company's financial and accounting behavior.This paper reviews the theoretical basis and empirical research on the lifting of short selling constraints policy and cash dividend policy.From the perspective of agency problem,this paper analyzes the impact of the exogenous event of lifting short selling restrictions on the company's cash dividend policy,and how does this effect change if the company's agency problem is serious,based on the research sample of China's A-share listed companies from 2007 to 2016.The empirical results show that the lifting of short selling constraints policy lead to a significant increase in the company's cash dividend payment level,and in the companies with serious first category agency problems,the promotion effect of policies on cash dividend is more obvious.Further research finds that after lifting the short selling constraints,the effect of the company's increase in cash dividend payment level is even more significant in the state-owned enterprises.The article expands the research framework for the economic consequences of lifting short selling restrictions and supplements the literature on the factors affecting cash dividend policy.