Controlling Shareholder, Split-Share Structure Reform and Cash Dividend Payments in China

38 Pages Posted: 30 Jul 2011 Last revised: 6 Jan 2012

See all articles by Chunyan Liu

Chunyan Liu

Kyushu University

Konari Uchida

Kyushu University

Yufeng Yang

China University of Mining and Technology (CUMT)

Date Written: July 4, 2011

Abstract

We investigated the relation between changes in cash dividend payments, non-public tradable shares, and the percentage of ownership of the controlling shareholder in Chinese firms before and after the Split-share structure reform. We found a significant reduction in cash dividends before and after the reform. Importantly, the reduction in cash dividends was significantly related to the reduction in the largest shareholder’s ownership; however, not associated to the decline in non-publicly tradable shares. These results suggest that Chinese controlling shareholders’ preferences for cash dividends is attributable to the inherent illiquidity of their shares rather than non-tradability of shares.

Keywords: Cash dividends, Controlling shareholder, Non-publicly tradable shares, Split-share structure reform, China

JEL Classification: G35; G38

Suggested Citation

Liu, Chunyan and Uchida, Konari and Yang, Yufeng, Controlling Shareholder, Split-Share Structure Reform and Cash Dividend Payments in China (July 4, 2011). 2012 Financial Markets & Corporate Governance Conference. Available at SSRN: https://ssrn.com/abstract=1898549 or http://dx.doi.org/10.2139/ssrn.1898549

Chunyan Liu (Contact Author)

Kyushu University ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan

Konari Uchida

Kyushu University ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan
+81-92-642-2463 (Phone)

Yufeng Yang

China University of Mining and Technology (CUMT) ( email )

Xuzhou, Jiangsu
China

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