The Effect Of The Ownership Structure On The Cash Dividend Policy

Dividend policy, as a financial strategy tool of listed companies, is used todistributing after-tax profit between cash payout and retained earnings, this problem isnot only a main focus of corporate finance research but also an important issue incorporate finance practice, a good many research scholars have been paying attentionon it. It is essentially the result of unceasing negotiations between different interestparties by cooperation and competition. Meanwhile, the ownership structure is themain factor which can decide the competition strength of each party, and thereforecash dividend policy will be affected by the feature of the ownership structureconsequently.Based on the Agency Cost Theory and the special ownership’s character ofChinese enterprises, this paper discussed the dominant shareholders’, if there is so,game process of cash dividend payout strategy and other possible benefitexpropriation behaviors. And this paper built the model of the ownership structureaffects the cash dividend policy and theoretically analyzed the effect of differentdimensions of the ownership structure to the cash dividend policy. This papercreatively introduced the Banzhaf Index in empirical design, and tested the tendencyand power of cash distribution with logistic regression model on the base of LintnerDividend policy.The conclusions below formed in this paper:1The concentration of ownership had the significant affect on both tendency andpower of cash dividend distribution.2The degree of ownership balance had a significant positive effect on thetendency of cash dividend distribution, while had a insignificant effect on the powerof dividend distribution.3Particularly, the owner of the share had relationship with the dividend policy.State-owned enterprises had no preference of the cash dividend. The proportion ofoutstanding shares had a significant negative effect on both the tendency and power ofcash dividend. And the proportion of institutional investors’ shares only affected thetendency of cash dividend distribution.Based on the study, this paper proposed: firstly, completing the laws andregulations of the dividend policy of listed companies; secondly, standardize and developing the institutional investors and advocating ownership’s checks and balances;thirdly, building and perfecting the governance mechanism of the companies, andencouraging the minority shareholders’participation.