Heterogeneity Of Major Shareholders,Exit Threat And Cash Dividend Policy

The China securities regulatory commission(CSRC)promulgated the semicompulsory dividend policy system in 2006 and 2008 respectively,which finally stipulated that the accumulative dividend paid by cash in the last three years of a listed company shall not be less than 30% of the average distributable profits of the company for three consecutive years,otherwise it cannot be refinanced.However,in the ten years after the promulgation of the system,some listed companies still did not pay any cash dividends within one year.In addition,the amount of cash dividends paid by listed companies that paid cash dividends was also significantly low,and the right of major shareholders to receive cash dividends was repeatedly violated.Therefore,it is of certain theoretical and practical significance to explore how major shareholders exert their governance mechanism and safeguard their right to obtain reasonable cash dividends.In recent years,as an effective governance mechanism,the threat of withdrawal by major shareholders has attracted extensive attention from scholars at home and abroad.They found that the threat of withdrawal can significantly reduce the agency problem,restrain the selfish behavior of managers and controlling shareholders,and thus produce governance effect.However,at present,there are few literatures to explore the economic consequences caused by the management of withdrawal threat of major shareholders,and the research on the relationship between the management of withdrawal threat of major shareholders and corporate cash dividend policy has not reached a consistent conclusion.Based on this,this paper studies the effect of large shareholders’ withdrawal threat governance on corporate cash dividend policy making,and further introduces the heterogeneity of large shareholders to explore the effects of different major shareholders’ withdrawal threat governance on corporate cash dividend policy.Taking the companies listed on the Shanghai stock exchange and shenzhen stock exchange from 2009 to 2018 after the promulgation of the semi-compulsory dividend policy as samples,this paper deduces theoretically and empirically the relationship between the threat of withdrawal of major shareholders and the cash dividend policy.It is found that the existence of exit threat will force enterprises to consider the interests of major shareholders when formulating cash dividend policies,and the exit threat governance mechanism has a significant positive effect on the willingness to pay cash dividends and the level of payment.Then under the condition of considering the big shareholder’s heterogeneity,this paper also found that the increase of the number of large shareholders,can improve the governance effect of the quit threats,have a more positive influence on cash dividend policy,have higher holdings of major shareholders,the exit threat stronger governance effect,can force companies prefer to dividend distribution and improve the level of dividend payments.Furthermore,this paper also finds that major institutional shareholders are more willing to take the management method of exit threat to safeguard their right to receive cash dividends.The management of the withdrawal threat of foreign major shareholders can also produce good governance effect on enterprises,prompting enterprises to pay more cash dividends;In the state-owned enterprises,the large shareholders use the withdrawal threat to carry out governance effect is not good,the withdrawal threat has not played a significant role in promoting the cash dividend;When large shareholders are engaged in management work at the same time,they are more willing to take a direct participation in governance.The governance effect of withdrawal threat is poor,and the promotion effect of cash dividend is significantly lower than that of non-management controlling shareholders.When major shareholders participate in the work of the board of supervisors,they face fewer agency problems and do not need to withdraw to play a governance role,so the promotion of cash dividends is also less.This paper explains the reasons of cash dividends from a new perspective,expands the research on the economic consequences of exit threat management,and enriches the discussion on the heterogeneity of major shareholders.It also provides theoretical Suggestions on how major shareholders should exert their governance mechanism to obtain reasonable cash dividends,which is enlightening for enterprises to choose different standard cash dividend policies for different major shareholders.