Study of Institutional Relationship between Institutional Holdings and Cash Dividend Policy
|School||Nanjing University of Finance and Economics|
|Keywords||Institutional Investors Dividend Payout Policy Cash Dividend The Signal Transfer of Dividend The Agency of Dividend|
The institutional investor activism rise during 1980s in the western countries. Institutional investor taking part in corporate governance has been an important mechanism. Along with the reform of non-tradable shares and adjustment of policies, the institutional investor rapidly developed in China, the power of influence corporate rate governance increasingly enhanced. Cash dividend distribution policy as a listed company one of the core financial policy, has been close attention to the interests of all parties. The dividend policy is closely related with the benefit of shareholders, and the dividend can result in the fluctuation of the stock price, so the dividend policy is very important in the financing activities.Our article research the action of institutional investors in stock selection and corporate governance participation from the cash dividend policy. Firstly, based on the Signal Transfer Theory of Dividend and the Agency Theory of Dividend, we analyze the relationship between Institutional investors and the cash dividend policy. Secondly, we expound the development of institutional investors and the distribution of cash dividends situation in our country. Lastly, based on the date from 2007 to 2009 in our country, we use positive approach to tests the relationship between institutional investor sand the cash dividend policy.Empirical results indicate that: (1)Payment of cash dividends the company’s institutional shareholding is not significantly higher than the company paid cash dividends; high institutional investors holding company cash dividends than those with low institutional investors holding companies. (2)Institutional shareholding of listed companies and the distribution of cash dividends tend to significantly positive correlation, suggesting that institutional investors participate in corporate governance to some extent, play a role in monitoring treatment. (3)Institutional investors prefer cash dividends of companies, listed companies and institutional investors sent shares are the proportion of the probability of a significant positive correlation, the cash dividend the company paid to send the level of institutional shareholding with a significant positive correlation. (4)Pressure-sensitive institutional investors play a monitoring role in governance, and the pressure-sensitive institutional investors is the opposite. But whether it is pressure-sensitive institutional investors, institutional investors or the pressure suppression, all the cash dividend policy to build from the investment portfolio.In this paper, based on the empirical conclusions of the corresponding policy recommendations put forward, government should take positive measures to further promote the development of institutional investors, and actively promote a rational investment for institutional investors to relax legal restrictions on listed companies. Large-scale development in the promotion of institutional investors also need for different types of institutional investors to guide and regulate the promotion of various types of institutional investors coordinated development.