An Empirical Research On The Impact Of Governance Structure On Dividend Policy Of Listed Companies In Regulated Industires

As the market-oriented reform is deepen, the basic function of market in allocatingresource becomes more important. But in some special industries government’s regulationstill exists, such as electric utilities, transportations and finance. Despite the number ofregulated industries is small, they play quite an important role in economic development andnational life. However, there are few deep and systematic studies on regulated industries’dividend policy. Thus, it is quite meaningful to focus on dividend policy in regulatedindustries pertinently both in the real life and in the academic research. Since they have beenunder the regulation of government and industry, the difference of corporate governancebetween regulated industries and nonregulated industries is quite significant. In this case, theresearch on dividend policy in regulated industries based on corporate governance structurenot only reveals the relationship of regulated industries’ governance structure and theirdividend policy, but also expands the range and perspective to explore dividend study.In the light of the domestic and international references and theories, this paper selectedChina’s listed companies as the research objects, and utilizes t test, ANOVA and k-w test toverify the difference of dividend policy between regulated industries and nonregulatedindustries. Secondly, according to the agency theory, several hypotheses have been raised toexamine the relationship of dividend policy and governance structure. The selection of sampleand establishment of research model had been done at the same time. Thirdly, the empiricalresearch had been carried out, from three aspects--equity structure, board governance andmanagerial incentive, to explore the relationship of dividend policy and governance structure.Based on the empirical results, some suggestions had been given to enhance the efficiency ofgovernance structure. Finally, the empirical results were concluded.The empirical results show that:(1) the level of dividend payout in regulated industries issignificantly higher than that of nonregulated industries.(2) The proportion of the largestshareholders has the significantly positive effect on regulated industries’ dividend, which isquite stable. While the degree of equity balances, scales of board and managerialcompensation have limited effect on the dividend policy.(3) The relationship between theproportion of independent directors and dividend payout is negative, which is different from other scholars’ studies and indicates that there exists a substitution effect between them.(4)The character of the largest shareholders, the board chairman and general manager,managerial ownership do not significantly affect regulated industries’ dividend policy, whichreveals that some measures should be carried out to enhance the efficiency of corporategovernance in regulated industries.