Dividends Policy and Ownership Structure in China

64 Pages Posted: 6 May 2004

See all articles by Gang Wei

Gang Wei

Cardiff University - Cardiff Business School

Weiguo Zhang

Tsinghua University

Jason Zezhong Xiao

Cardiff Business School, Cardiff University

Date Written: July 2003

Abstract

In this paper, using 3,994 observations of China listed firms between the years 1995 and 2001 as a sample, we find that there is a significantly positive correlation between the state ownership and cash dividends, and a significantly negative correlation between the public ownership and stock dividends. In particular, we find that the relation between dividends policy and ownership structure is nonlinear. The higher the state ownership, the higher cash dividends rates. The higher the public ownership, the higher stock dividends rates. We conclude that the managers of China listed companies are likely to cater for the preference of different shareholders.

Keywords: Dividends Payment Policy, Ownership Structure, Cash Dividend, Stock Dividend

JEL Classification: G35, G32, G34

Suggested Citation

Wei, Gang and Zhang, Weiguo and Xiao, Jason Zezhong, Dividends Policy and Ownership Structure in China (July 2003). EFMA 2004 Basel Meetings Paper. Available at SSRN: https://ssrn.com/abstract=463924 or http://dx.doi.org/10.2139/ssrn.463924

Gang Wei (Contact Author)

Cardiff University - Cardiff Business School ( email )

33 Blacweir Terrace
Cardiff CF10 3EU, CF1 3YN
United Kingdom
(+44)-29-20876545 (Phone)
(+44)-29-20874419 (Fax)

Weiguo Zhang

Tsinghua University ( email )

Beijing, 100084
China

Jason Zezhong Xiao

Cardiff Business School, Cardiff University ( email )

Aberconway building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

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