The Empirical Study Of Managerial Entrenchment's Impact On Cash Dividend Policy

The dividend policy is an important financial policy,with investment policy and fund-raising policy,they together constitute the three core contents of corporate financial activities,and affect shareholders' wealth maximization goal.Research from the managerial entrenchment point of view of cash dividend policy in China's listed companies,will deepen the analysis of agency theory and cash dividends policy, which will improve the corporate governance system.The paper first reviewed the theory of dividend policy and the literatures of managerial entrenchment,and made research assumptions.Based on the related dividend theory,then it analyzed the current cash dividends of China's listed companies and set up research design.Finally using the data from 2005 to 2007 of China's listed companies,with the empirical research methods,it analyzed how managerial entrenchment influences the likelihood and the level of payouts of the dividends.In this paper,there are comprehensive indicators to reflect the managerial entrenchment,and which are used to test the influence of cash dividends in listed companies' policy.Empirical research uses two models:One is Logit model,which is used to study the influence of managerial entrenchment to the likelihood of cash dividends payouts;The other one is Tobit model,which is used to study the influence of managerial entrenchment to the level of cash dividends payoutsThe empirical results show that:(1)The holdings and the salary of general managers are positively related to the likelihood of payouts separately.(2)The salary of general managers is positively related to cash dividend per share.Whether the general manager or the chairman being one person is negatively related to cash dividend per share.