Control rights and cash dividends: A moderating effect of product market competition

Xiaotao Ma, Huifang Liu and Xinya Wang

Finance Research Letters, 2024, vol. 65, issue C

Abstract: This study aims to investigate the impact of control rights held by actual controller on dividends in China, and further explores whether this impact is affected by product market competition from both industry competition (IC) and corporate market power (MP) perspectives. The results show a positive relationship between control rights and dividends in both state-owned and non-state-owned enterprises, and the mechanism is dividend tunneling rather than governance. Moreover, IC has a disciplinary effect on dividend tunneling by the controllers, and MP weakens the positive relationship, which is associated with the promotion of stock liquidity, information disclosure quality and financial risk.

Keywords: Dividend policy; Actual controller; Product market competition; Market power; Dividend tunneling (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324005567

DOI: 10.1016/j.frl.2024.105526

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