The Empirical Analysis On The Implications Share-trading Reform Of Listed Companies’ Cash Dividend Policy

The establishment of the Shanghai and Shenzhen Stock Exchange marks thebirth of China’s capital market. In order to ensure the position of absolute control ofstate-owned economy and the smooth formation of China’s capital market, we haveadopted a system of splitting share, which is the inevitable choice when thebackground to the establishment of capital markets. With the rapid development ofChina’s capital market, however, the split share structure was a birthmark of China’scapital market which is expansible, and its negative effects become increasinglyprominent. In order to ensure the healthy growth of the Chinese capital market, wehave never ceased to improve a system of splitting share. After a series of attempts, inApril29,2005we started the reform of Splitting share structure, known as "the tworevolution" in China’s capital market. The reform put the price as the theoreticalfoundation, and "Unified organization, Decentralized decision making" as theoperating principles.The reform of the split share structure is to change the equity split pattern of ourstock market. The reform not only to eliminate the dual structure of tradable sharesand non-tradable equity in home, and the resulting due to the dominance phenomenon,but also to conduct a comprehensive perfection for the Chinese capital market.On theone hand, the reform get rid of the pattern of the split share of China’s securitiesmarket, to fundamentally change the ownership structure of China’s securities market,which can further promote the improvement of corporate governance mechanisms; onthe other hand it speed up mechanism for the conversion of the capital market,strengthening market constraint mechanism of the listed companies, so theembarrassing situation what investors are no longer showing the same shares ofdifferent weights and unequal pay is not appear.From the perspective of cash dividends to test the effect of the share reform andlearn from previous studies, this paper studied the implementation of the effect of thesplit share structure reform by doing correlation analysis of the cash dividenddistribution of tradable share reform of listed companies in China. This paper hadused comparative analysis of methods.It did the empirical analysis of listedcompanies cash dividend changes between before and after the split share structure reform from three aspects from three aspects(split share structure reform, changes inthe shareholding structure of the share reform of listed companies, listed companies’governance systems and efficiency change).These studies are all explained the impactof the split share structure reform for the cash dividend policy of listed companies inChina.After made assumptions,designed the variable, selected the sample, chose themodel, analysis of panel data by linear regression random effects model, it obtainedthe following conclusions: The share reform to reduce China’s securities marketownership concentration, but did not change the negative correlation betweenownership concentration and earnings per share cash dividend; The share reformimprove the checks and balances of listed companies, large shareholders to choosebetween the conspiracy rather than checks and balances; The share reformsignificantly increased the proportion of outstanding shares, significantly reduces thecorrelation of the outstanding shares and per share cash dividend, but did notfundamentally change the type of relationship is still negative correlation. Finally, onthe basis of the theoretical and empirical analysis, a series of practical suggestions forChina’s securities market has been proposed,which will further regulate theenactment of the dividend policy of listed companies.