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An Empirical Study on the Relationship of Ownership Structure and Cash Dividend Policy of Listed Companies of China

Author: YangRunKun
Tutor: MaYongQiang
School: Southwestern University of Finance and Economics
Course: Financial Management
Keywords: Ownership structure Cash Dividend Policy State-owned shares Corporate shares Outstanding shares of
CLC: F275
Type: Master's thesis
Year: 2010
Downloads: 443
Quote: 0
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Abstract

Dividend policy in the formative years of the company's shares, was originally just a primitive profit distribution activities, the company earned profits allocated to shareholders. With the development and maturation of the joint-stock company, the profit distribution activities and investment, financing, financial operations rise to the same status as the company's financial decision-making, and the choice of dividend policy from within the company, is no longer a single profit distribution behavior but the major shareholders, minority shareholders and operators multistakeholder game results; relative to the external, dividend policy or a wind vane, to convey the company's operating performance and market image information to outside investors. The ownership structure is the basis of corporate governance is to determine the largest shareholder of minority shareholders and operators, the key factors of the differences of party strength. One way of dividend policy as a shareholder return on investment, will naturally cause the attention of the shareholders. Equity shareholder structure can decide how the right to participate in corporate governance, much discourse over the dividend policy formulation, the relationship between the research shareholding structure and dividend policy is meaningful. Research on the relationship between Ownership Structure and Cash Dividend Policy, countries with developed capital market has been the outcome, and the formation of a system theory. China is still in the development process, many aspects need to be explored and research. Cash dividends is the most common and the most common one form of dividends paid in mature capital market, the cash dividend policy has become the main target of the scholars This article study the ownership structure and dividend policy, but also from the cash dividend policy perspective to start and does not involve stock dividends and other forms of dividend policy. From the start of 2005, the equity interest of China began to reform, \Achieve full circulation process a large number of non-tradable shares, the equity structure of listed companies will be the inevitable changes, changes in the structure of the company's internal equity will lead to the adjustment of power between shareholders, this power adjustment will result in a cash dividend policy of listed companies change; will affect the dividend policy, it is how it affects. Think about and answer these questions is the original intention of this writing. , Most of the existing domestic research literature is made before the start of the share reform research, this article select the share reform after three years of data to study, and also do a little humble hope of reform in the capital market research. The paper selects the panel data of 2005-2007, in 1604 Shanghai and Shenzhen A-share listed companies as the initial samples, to ensure the validity of the data under the premise of the initial sample rigorous screening excluded ST, PT cash dividends unusual company, excluding the financial industry, listed companies and annual information company missing excluded, the remaining sample of 1035 observations 3105. Use a combination of theoretical and empirical research, analysis and research on the relationship between ownership structure and cash dividend policy. The text is divided into five chapters: Chapter Introduction. This chapter explains the background, meaning and purpose of the topics of this paper describes this method, the innovation of this paper, and the basic concept of elaboration. The second chapter of the literature review. This chapter begins with a review of the Western classical theory of dividend policy, and then separately reviewed empirical studies on the impact of domestic and foreign equity structure of the cash dividend policy. The theoretical analysis of the relationship between Chapter Ownership Structure and Cash Dividend Policy. The first part of this chapter first analyzes the relationship between Ownership Structure and Cash Dividend Policy, and a comparative analysis on the dividend policy of listed companies in Germany and Japan, and the Anglo-American listed companies. Also analyzed the changes in cash dividends since the establishment of China's capital market. The second part is the descriptive statistics observations each year. Changes in trends and cash dividends Analysis 2005-2007 shareholding structure, trend analysis based on empirical analysis of the fourth chapter to prepare. Chapter empirical analysis of the relationship between the domestic equity structure of listed companies and the cash dividend policy. Make reasonable assumptions based on the analysis of the third chapter of descriptive statistics and draw on the research literature, per share cash dividend for the explanatory variables, the proportion of state-owned shares, the proportion of corporate shares, the largest proportion of the outstanding shares, A shares in the proportion of tradable shares as explanatory variables, the main business income, asset-liability ratio, earnings per share, per share from operating, financing and investing activities cash flows as a control variable, linear regression analysis of panel data using Stata software. And the model is related to the testing and adjustment, and finally arrive relatively clear results. Chapter study conclusions and recommendations. Empirical Analysis of the results based on the fourth chapter, draw major conclusions: (1) the proportion of state-owned shares, there is a significant positive relationship between the proportion of the largest shareholder and cash dividends per share. The higher the proportion of the proportion of state-owned shares of the largest shareholder, the company is more inclined to the payment of cash dividends, and the payment of cash dividends per share more. This is the same as most of the literature concluded that our largest shareholder, and the presence of state-owned shareholders with cash dividend preference. (2) the proportion of corporate shares and was a significant negative relationship between the per share cash dividend, which is contrary to the conclusions of some literature. I think that with the rise in the proportion of corporate shares, the corporate shareholders gradually gained control over listed companies, as the controlling shareholder, corporate shares does not want to cash dividends, the payment of cash dividends will reduce cash flow rights in the hands of its is reduced control of resources. Legal person shares of the holding level, it will reduce the cash dividend payment. (3) A shares tradable shares with significant negative relationship between cash dividends per share. This reflects the phenomenon of tradable shareholders cash dividends lukewarm response. At present, China's listed companies have not yet established a stable the consecutive dividend policy habits, small investors usually only frequent changes in the hands of holders of the stock to get capital gains, with little hope listed companies to distribute dividends. The cash dividend policy of listed companies in China and did not really play a signaling function, but that they often the large shareholders emptied behavior, transfer of cash assets and other phenomena linked, resulting in the tradable shareholders cash dividends lukewarm emotions. Listed companies need to build the confidence of small investors with a stable and reasonable dividend policy. (4) The main business revenue number, earnings per share and cash dividends per share between there is a significant positive correlation between the significant negative correlation between the asset-liability ratio and per share cash dividend, the companies in the dividend policy the time, or to take into account the impact of the company's results of operations, capital structure and profitability. The relationship between per cash flow from investing activities and financing activities per share cash flow and cash dividends are significant negative correlation was not significant, and the relationship between the per share from operating activities Net cash flow per share cash dividend, but the symbols and assumptions consistent listed companies in the cash dividend, to consider the enterprise's cash flow from operating activities, financing and investment demand. The purpose of our equity division reform in order to achieve the full circulation of stocks, but the reform can not be exactly the same controlling shareholder and minority interests of investors, coupled with the share reform impossible one place, so the process of lifting the ban the circulation of non-tradable shares in the country to strengthen the supervision of listed companies and the protection of small investors, as soon as possible to establish investor protection mechanisms. Listed companies should also develop a stable and reasonable dividend policy and commitment, give full play to the dividend signaling function, enhance the value of the company to attract stable investors. The innovation lies in this article: First, the researchers selected panel data and panel data models, compared to the cross-sectional data, panel data to reduce the collinearity between variables, the better equity structure and cash dividends change dynamically ; second, more comprehensive selected shareholding structure variables, and subdivided into equity-type variables and Ownership Concentration variables studied, the more in-depth discussion of how ownership structure affects the dividend policy; Third, for the first time selected into the cash flow variable, and its impact on cash dividends in the control variables.

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