EconPapers    
Economics at your fingertips  
 

Multiple large shareholders and dividends: Evidence from China

Fuxiu Jiang, Xinni Cai, Zhan Jiang and John R. Nofsinger

Pacific-Basin Finance Journal, 2019, vol. 57, issue C

Abstract: Faccio et al. (2001) find that when East Asian firms have multiple large shareholders, they will collude to expropriate wealth and withhold dividend payouts. However, when it becomes difficult for large shareholders to expropriate wealth through activities like tunneling, large shareholders may then need dividends to fund personal cash flow needs. Thus, they may cooperate to make firms pay dividends and pay large dividends. To test this hypothesis, we study Chinese-listed firms. Consistent with our contention, we find that firms with multiple large shareholders are more likely to pay dividends and pay large dividends. These activities are especially prevalent after restrictions were placed on tunneling. We also find that dividend payouts and large payouts are more likely when the largest shareholder needs the cooperation of other blockholders to exert control over dividend payout policy, and when multiple blockholders are of the same identity.

Keywords: Multiple large shareholders; Dividends; China (search for similar items in EconPapers)
JEL-codes: G3 G35 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X1830595X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:57:y:2019:i:c:s0927538x1830595x

DOI: 10.1016/j.pacfin.2019.101201

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-05-02
Handle: RePEc:eee:pacfin:v:57:y:2019:i:c:s0927538x1830595x