Study On Agency Cost And Cash Dividend Policy Of Chinese Listed Company

The dividend policy is one of the most important activities of corporate finance. On one hand it is a logic continuer of financing and investment of the company,and it is a certain outcome of financial management. On the other hand,appropriate dividend policy not only can establish the good corporate image but also can stimulate the enthusiasm that investors invest in the company continuously which make company get long-term,steady development terms and chance. With the development of capital market, the dividend policy becomes the main subject that researchers focus on. Along with the establishment of different theories,people have deep understanding about the dividend policy. However,there is not any conclusion to the dividend policy,neither in the western developed country nor our country although a large amount of literature exists. "Fan of dividend"still exists.Agency theory is one of the mainstream theories to explain the dividend policy. Its basic idea is that, distributing cash dividend can be used to solve the agency problem effectively. It can explain the dividend policy in the developed countries such as USA. However, because of the special ownership structure, obvious agent cost and the low efficiency stock market, so there are three different agency problems in Chinese listed company, such as the agency problems between the shareholders and manager, the agency problems of the state holdings and the agency problems between the larger stockholder and the smaller stockholder. Dividend distribution policy of Chinese listed company presents some anomaly aspects such as various forms of dividend distribution and none dividend distribution. We can't copy the developed countries' agency theory because of the fundamental conditions of the theory are not exist in China.The author tries to focus on the "Agency Theory" of the dividend policy, analyze the characteristics of dividend distribution and ownership structure and analyze the reflect variables of the agency cost in Chinese listed companies. Then research the intimate relationship between the agency problems in Chinese listed company and its cash dividend policy. Research and analyze the influence of distributing cash dividend on different agent cost by the detailed analysis and the empirical study. We find cash dividend can debase the agency cost between shareholders and manager. Cash dividend is quadratic non-linear relationship to state share's proportion. Natural cash dividend policy is just approach to gain public income by larger shareholder, but not to reduce the private benefit of larger shareholder.