The Influence Of The Controlling Shareholder Characteristics On The Cash Dividend Policy

The cash dividend policy is an important financial policy, which not only affects thesteady development of the listed company, but also involves the investors’ interests.According to the current cash dividend distribution situation in our country, cashdividend policy of many listed companies is not reasonable, and many illegal behaviorsincluding no distribution, less distribution and over distribution still exist. Whether alisted company distributes cash dividend is not only related to the capital outflow of thecompany, but also directly affects the income of the shareholders, which therefore is vitalfor both the company and the shareholders. However, as the real subject for financialdecisions, shareholders will naturally affect the cash dividend policy formulation, andtherefore, it is of great significance to research the influence of shareholders to cashdividend policy.Based on the relevant literature, this paper determines the controlling shareholdersfrom the view of ultimate controllers. To test whether the related features of controllingshareholders affect the cash dividend policy and what kind of influence it will have, thispaper adopts standard and empirical research method, combining the qualitative andquantitative analysis to conduct the theoretical analysis and empirical test. Firstly in thetheoretical analysis, by introducing ultimate controllers, relevant concept of controllingshareholders is introduced. Secondly, relevant features of controlling shareholders areintroduced, and various aspects influencing the cash dividend distribution are analyzed.Lastly, this paper discusses how the two features of controlling shareholders affect thecash dividend distribution. By collecting the statistics data of the listed company, thispaper describes the current situation of controlling shareholders and cash dividenddistribution in our country. In the empirical test, based on the statistics data of amanufacturing listed company from2008to2010, from the two aspects that whether thecontrolling shareholders has the state-owned property and the separation of two rights,this paper establishes two models according to the cash dividend payment tendency andpayment capability, utilizing Logistic Regression to test whether the controllingshareholders has strong influence on the cash dividend distribution tendency. At the sametime, Multiple Linear Regression is used to test whether the controlling shareholders are linear with the cash dividend distribution intensity.The research demonstrates that the economic nature of the controlling shareholdersin manufacturing listed company dramatically affects the cash dividend distributiontendency and capability, and compared with the non-state-owned controllingshareholders, the state-owned shareholders’ distribution tendency and capability isweaker. What’s more, the separation of two rights does not affect the distributiontendency, but affects the distribution capability. And the higher the separation degree oftwo rights is, the weaker the distribution capability will be. In conclusion, the controllingshareholder features have an effect on cash dividend distribution. Combined with thecontrolling shareholder features and the problems existed in the cash dividenddistribution, this paper proposes suggestions from several aspects including laws andregulation, information disclosure, supervision strength, and internal governance, toregularize the behavior of the controlling shareholders, listed companies and the stockmarket, which achieves the long-term development of the company and the protection ofthe investors’ interests.