A Study On Shareholder Structure And Cash Dividend Policy

The dividend policy is one of the core financial strategies for listed companies and has been concerned by all concerned parties. China launched the reform of non-tradable shares from April 2005, and the reform has completed in late 2006. The non-tradable shares have been put into trade successively and will finally circulate in the near future. The share structure of listed companies has changed before and after the reform of non-tradable shares, thus the dividend policy may change accordingly.In this paper, we would like to examine the following aspects: if the tunnel effect has been decreased; if the dividend payouts have reflected the will of most shareholders; if the institutional investors have participated corporate governance more actively, and if the cash dividend policy has decreased the agency cost.The empirical study in this paper selects two groups of listed companies as samples. The first group is the companies that all the non-tradable shares have circulated, the other group are the companies that all the shares have circulated when they are to be listed. We use the data from year 2008 to 2009 to examine the cash dividend payouts which influenced by share structure and shareholder natures.In this paper we proposed four models with respect of dividend distribution tendency and dividend distribution efforts to examine the assumptions through logistic regression and multivariate linear regression analysis. The following conclusions can be drawn :(1)The share ratio of the first major shareholder which represent concentration of ownership have a positive correlation both with dividend distribution tendency and dividend distribution efforts; (2)The share ratio of the second to tenth major shareholder which represent balance degree of ownership have a positive correlation both with dividend distribution tendency and dividend distribution efforts; (3)The share ratio of the institutional shareholder which represent the shareholder nature have a negative correlation with dividend distribution tendency .In the last chapters we put forward the corresponding policy recommendations. As the non-tradable shares have been completely circulated, the concentration of ownership should be progressively declined. This activity aims to reduce the share ratio of big shareholders and increase the ration of institutional investors as well, and further improves the corporate governance structure of the listed companies in China.