Study On The Relationship Between Stock Liquidity,Investor Protection And Dividend Payout

With the continuous development of the stock market,it has become an important financing source for listed companies.Stock liquidity plays a pivotal role as a thermometer for the stock market,which is bound to have an impact on multiple aspects such as corporate governance,capital structure in corporate finance area.As an important part of corporate financial management,dividend policy has been widely discussed.The current research on what factors affecting dividend policy has expanded from internal factors to the external environment.This paper attempts to investigate whether stock liquidity,the external environmental variables,affects dividend payout from the perspective of market microstructure.Base on this case,we make a further study on taking the adjustment variable of investor protection level into our framework to explore whether it can affect the relationship between stock liquidity and dividend payout.This paper selects 13660 sample observations from A-share listed companies in 2006-2017 for a total of 12 years.Through the normative analysis and empirical research,the relationship between stock liquidity,investor protection and dividend payout level has been confirmed.This paper summarizes the current academic achievements related to the research topic of this paper.On this basis,we construct a framework of action mechanism to explain the relationship between stock liquidity,investor protection and dividend payout based on theoretical analysis.The model is empirically analyzed.In the empirical research process,this paper uses principal component analysis to measure the degree of investor protection,and apply multiple regression to conduct the overall and group regression.To prove the robustness of the research results,this paper further uses the instrumental variables to carry out two-stage regression to control endogenous problems,and to consolidate the statistical significance of the model by replacing explanatory variables.We finally obtain the following three conclusions:(1)Stock liquidity has a negative impact on the level of dividend payout.(2)The higher degree of investor protection,the stronger negative impact of stock liquidity on the level of dividend payout.(3)The nature of property rights and the differentiated dividend policy are important factors affecting the relationship between stock liquidity,investor protection and dividend payout.The effect is more obvious among the sample of state-owned enterprises and the implementation of differentiated dividend policy.At the end of the paper,the relative suggestions are made for regulatory authorities,listed companies and investors.