The Impact Of Ownership Structure On Cash Dividend

Dividend policy is the one of the three major company financial decisions, Black (1976) called the dividend policy as "dividend puzzle", Brealey & Stewart (1988) stated that the company's dividend policy is one of the company's top ten financial problems. the academic hold the different point of view about the role of cash dividends. Some scholars believe that the cash dividend can be effectively reducing the cash flow that controlled by the company's management, and thus reduce agency costs. But some scholars believe that the cash dividend is the tools of the largest shareholder expropriation the interests of listed companies and minority shareholders.This thesis make some research on the influence of the ownership structure have make effect on the dividend policy in the context of institutional environment of the share splitting reform. At the beginning of this thesis, use the present situation of dividend policy and ownership structure to introduce the subject; make a summary about the cash dividend policy theory in the second chapter; after analyzing the share splitting reform, the third part bring forward a hypothesis that the effect of ownership structure impact on the cash dividend; the main part of the thesis, use cash dividend as a main clue and in the context of share splitting reform, make a empirical research on the influence of ownership structure impact on the dividend policy from ownership concentration, equity and balance degree,type of ownership structure and other different aspects.The main conclusions of my research are as follows:1, Most of The listed companies in China do not pay cash dividends or have a lower level of cash dividends, or have abnormal cash dividend activities, all these phenomenon have been proved in the previous researches.2, The first major share holder's stock percentage have positive correlation with the cash dividend. The first major share holder has more control power if they hold more stocks, and may ask for more dividend. And this is the way of the largest shareholder expropriation the interests of listed companies and minority shareholders. After the share splitting reform, "the same stock with different rights and stock price is no longer exit, the first major shareholder's preference for cash dividends have also been reduced.3, Because the second to the fifth-largest shareholder have less control power and shareholding ratio then the first major shareholder, they did not prefer to cash dividends, but rather served as a supervisor's role, and thus the largest shareholder's expropriation behavior have been constrained. This supervisor's role is more obvious after the share splitting reform.4, The shareholding ratio of state-owned and corporate body have have positive correlation with the cash dividend level too. And state-owned shareholder is more preference of cash dividend than corporate body shareholders. This preference has been weaken after the share splitting reform.5, Institutional shareholder's shareholding ration has positive correlation with cash dividend level and this relationship is enhanced after the share splitting reform. After the reform, institutional investors' share-holding ratio is increased, so they prefer to use the free cash flow to pay cash dividends, this activity have reduced the agency cost which is caused by the free cash flow.