The influence of ownership structure on dividend policy Part I: The influence of ownership structure of listed companies in China on dividend policy.
The higher the equity concentration of listed companies, the more cash dividends will be paid, that is, the equity concentration is positively related to cash dividends. The existence of major shareholder holding is the primary reason for the positive correlation between equity concentration and cash dividend payment.
Keywords: equity structure dividend policy countermeasures
I. Dividend Policy and Ownership Structure
Dividend policy refers to the company's strategy of allocating or retaining its earnings for reinvestment, which is usually expressed by dividend payout ratio (dividend per share/earnings per share). The dividend payment rate will affect the company's retained earnings and internal financing. It is not only a logical continuation of the company's fund-raising and investment activities, but also a reasonable and stable dividend policy can not only help enterprises establish a good image, but also stimulate investors' enthusiasm for the company's continuous investment.
Ownership structure is the foundation of corporate governance structure, and corporate governance structure is the concrete operation form of ownership structure. Different ownership structure determines different enterprise organizational structure, thus determines different corporate governance structure, and ultimately determines the behavior and performance of enterprises. In the modern market economy, the ownership structure is not only the basic premise of the formation of the stock market, but also the logical starting point of corporate governance. In this sense, the company's dividend policy is not only restricted by the ownership structure, but also has an impact on the ownership structure. Investigating the formulation of the company's dividend policy will inevitably involve the fundamental issue of equity structure. Compared with the shareholding structure of listed companies in most foreign countries, the shareholding structure of listed companies in China is complex, centralized and illiquid. According to the different ownership subjects, the ownership structure can be divided into state shares, legal person shares and social public shares. According to liquidity, it can be divided into non-tradable shares and tradable shares.
The special ownership structure has largely formed the unique dividend policy of listed companies in China, that is, more stock dividends, more transferred share capital, more undistributed shares and less cash dividends. Three more and one less? Characteristics of dividend distribution. This feature of dividend distribution has contributed to the speculative atmosphere in China's capital market to some extent.
Second, ownership concentration is positively related to cash dividend payment.
Through the analysis of dividend policy of listed companies in China in recent years, it is not difficult to find that the higher the equity concentration of listed companies, the more cash dividend payment, that is, there is a positive correlation between equity concentration and cash dividend payment. The existence of major shareholder holding is the primary reason for the positive correlation between equity concentration and cash dividend payment. The ownership concentration of listed companies in China is very high, and the control of major shareholders is obvious, which widely exists in state-controlled listed companies and family-controlled listed companies. In addition, the existence of holding companies with small scale and scattered private capital is also an important reason for the positive correlation between equity concentration and cash dividend payment. Under the condition that the external supervision mechanism of listed companies in China is not perfect and the legal protection of shareholders' interests is not strong enough, the motivation of managers to keep cash for transitional investment is getting stronger and stronger. Due to the lack of shareholders' supervision over operators, the efficiency of resource utilization of listed companies is low, thus reducing the cash dividend level of decentralized holding companies.
Third, non-tradable shareholders and tradable shareholders have different preferences for dividends.
Ownership structure is classified according to liquidity (i.e. tradable shares and non-tradable shares). Because of the differences in investment cost, shareholders' rights and investment objectives, the two types of shareholders have different dividend policy preferences. The reasons why non-tradable shareholders and tradable shareholders have different preferences for dividends are as follows: First, there are conflicts of interest between non-tradable shareholders and tradable shareholders. The appreciation of non-tradable shareholders' assets mainly depends on the appreciation of net assets, not the profits of listed companies. The investment income of non-tradable shareholders has nothing to do with the market price of tradable shares. Although the company's profit growth can bring about the rise of the stock price, the non-tradable shareholders can't get the benefit of the stock price rise. Secondly, there are significant differences between non-tradable shareholders and tradable shareholders in the cost of acquiring equity. Finally, non-tradable shareholders and tradable shareholders are unequal in dividend distribution. It is manifested in two aspects: first, the inequality of circulation rights. Circulating shareholders can enjoy a market appreciation opportunity that non-circulating shareholders do not have because they have the right to circulate, but the dominant non-circulating shareholders do not have such a market opportunity. Then the non-circulating shareholders with control choose to distribute more cash dividends? Make up? Because there is no circulation, right? Regret? ; Second, the dividend rate is not equal: as can be seen from the above, the capital contribution cost of non-tradable shareholders is much lower than that of tradable shareholders, but they enjoy the same dividend rights as tradable shareholders, and non-tradable shares account for a large proportion of the total share capital of listed companies, so they can get more cash dividends, while tradable shareholders with high capital contribution cost can only get less cash dividends because of their small equity ratio. Therefore, non-tradable shareholders are always more inclined to pay dividends in cash, while tradable shareholders are just the opposite.
Four, the policy recommendations for the reform of the ownership structure of listed companies in China
(a) actively and steadily promote the reform of the shareholding structure, and gradually realize the full circulation of shares. The unique ownership structure of listed companies in China is the institutional defect left by the inadaptability of economic system reform and the unreasonable design of stock market system. This kind of ownership structure is extremely unreasonable, which makes corporate governance lack the same interest base, resulting in the strange phenomenon of different rights, different interests and different prices for the same share; This ownership structure damages the interest mechanism of listed companies, which makes the interest relationship between non-tradable shareholders (large shareholders) and tradable shareholders (small shareholders) completely uncoordinated or even antagonistic, which leads to the serious distortion of the operating behavior of controlling shareholders of listed companies and even becomes the institutional basis for listed companies to pursue high-premium equity financing crazily. For the whole stock market, this ownership structure often leads to market information distortion, which affects the expected stability and price discovery function of the stock market and is not conducive to the overall innovation and standardized development of the stock market.
(2) Vigorously cultivate qualified institutional shareholders. From the mature stock market, institutional investors, especially investment funds, are the main force in the market. Decentralized public shareholders increase the instability of market trading activities and prices, which easily leads to the deviation of market resource allocation and affects the operating efficiency of the securities market. Investment funds have the characteristics of expert management, rational investment and long-term return. Therefore, there is a trend that public ownership is gradually replaced by institutional shareholders in the world. The major shareholder control of listed companies in China is different from that in western countries. The reason why the agency cost of corporate governance controlled by major shareholders in China is high is because the country as a major shareholder is not an independent economic entity with the goal of maximizing profits. At present, the degree of marketization of China's securities market is very low. Is the stock market still the same? Policy city? . In the market dominated by individual investors, the policy regulation of government supervision departments also has a passive side: banker? The manipulation and irrational speculation of retail investors have artificially caused abnormal fluctuations in the China stock market, which has harmed the interests of minority shareholders. In order to protect the interests of minority shareholders, government departments should actively promote the development of various fund organizations and cultivate the strength of institutional shareholders to solve the current problem of excessive speculation, but pay attention to establishing effective supporting mechanisms to guide the behavior of institutional investors. This can reduce the social burden of the country, guide these funds to hold shares of listed companies, and effectively improve the shareholding structure of listed companies.
(3) Strengthen the protection of small and medium investors. The establishment of specialized institutions to protect the rights and interests of small and medium-sized shareholders can play the following roles in protecting the interests of small and medium-sized investors: first, attend the shareholders' meeting on behalf of small and medium-sized shareholders and exercise the right to vote, propose and inquire; Second, represent and organize minority shareholders to exercise their litigation rights and other relief rights, and seek relief and help when their interests are damaged; Third, provide advice for minority shareholders to participate in company management, exercise and safeguard their rights and interests according to law, and provide opinions and suggestions for the legislature and relevant departments to protect the rights and interests of minority shareholders.
(4) Standardize the dividend distribution behavior of listed companies. Standardize the formulation of dividend distribution plan and information release of listed companies. In view of the present situation of dividend distribution of listed companies in China, we should strengthen the supervision of listed companies and guide investors by formulating policies and regulations that conform to the laws of economic operation. (1) We should take advantage of the situation and improve the tendency of capital expansion by sending a large number of shares, increasing capital and shares, and distributing shares. (2) Increasing dividends and refinancing? Hook? Policies to avoid unhealthy dividends. (3) For listed companies that habitually do not distribute, we can learn from foreign practices. In foreign countries, there are regulations that prohibit institutional investors from investing in companies that do not pay dividends for a long time, and they can also impose certain tax on companies when their undistributed profits per share reach a certain amount without distributing cash dividends. In order to protect the interests of small and medium-sized investors and truly let listed companies distribute in time, the securities regulatory authorities can also learn from this practice abroad.
(5) Strengthen information disclosure and improve the information disclosure supervision system. An effective stock market is based on full information disclosure, and a perfect information disclosure system is the premise to ensure the openness, fairness and impartiality of the stock market. The quantity and quality of information disclosure of listed companies directly affect investors' judgment and decision-making, whether their legitimate rights and interests can be guaranteed and whether the stock market can operate normally.
References:
Ye fangtong. On the influence of ownership structure on dividend policy. Industry and technology forum. 2007 (Vol. 6,No. 12).
[2] Front red flag. An empirical analysis of dividend policy of listed companies in China based on agency theory. Beijing: National Library of China.
[3] Yan Daying. An Empirical Study on the Influence of Controlling Shareholders' Value Orientation on Dividend Policy of Listed Companies in China. Nankai economic research. 2004.6。