Mutual Funds’ Holdings and Listed Firms’ Dividend Payouts in China

47 Pages Posted: 28 Jan 2013

See all articles by Jingjing Yang

Jingjing Yang

Guangdong University of Foreign Studies

Jing Chi

Massey University - School of Economics and Finance

Martin R. Young

Massey University - School of Economics and Finance

Date Written: January 27, 2013

Abstract

This paper investigates the relationship between mutual funds’ holdings and listed firms’ dividend policies in China. We find that mutual funds prefer to hold the shares of listed firms that pay cash or stock dividends. However, mutual funds are not particularly attracted to firms that pay high cash or high stock dividends. Further, listed firms tend to pay more cash or stock dividends after short-term focused mutual funds’ holdings increase. Long-term focused mutual funds only encourage listed firms to distribute more cash dividends through their shareholdings, but cannot significantly influence stock dividend rates. This maybe due to that a large stock dividend payment will have a negative impact on some key financial ratios, and have a negative impact on the liquidity, which would be a major concern for long-term mutual funds.

Keywords: mutual funds, dividends, China

JEL Classification: G29, G35

Suggested Citation

Yang, Jingjing and Chi, Jing and Young, Martin R., Mutual Funds’ Holdings and Listed Firms’ Dividend Payouts in China (January 27, 2013). Asian Finance Association (AsFA) 2013 Conference. Available at SSRN: https://ssrn.com/abstract=2207532 or http://dx.doi.org/10.2139/ssrn.2207532

Jingjing Yang (Contact Author)

Guangdong University of Foreign Studies ( email )

2 Baiyun Avenue, Baiyun District
GuangZhou, Guangdong 510420
China

Jing Chi

Massey University - School of Economics and Finance ( email )

Private Bag 11-222
Palmerston North,, 4442
New Zealand
+64 6 3569099 Ext. 84048 (Phone)
+64 6 350 5651 (Fax)

Martin R. Young

Massey University - School of Economics and Finance ( email )

Private Bag 11222
Palmerston North, 4442
New Zealand

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