Controlling shareholder, split-share structure reform and cash dividend payments in China

Chunyan Liu, Konari Uchida and Yufeng Yang

International Review of Economics & Finance, 2014, vol. 29, issue C, 339-357

Abstract: We investigated the relationship between changes in cash dividend payments, non-public tradable shares, and the percentage 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 is significantly related to the reduction in the largest shareholder's ownership; however, it is not associated with the decline in non-publicly tradable shares. These results suggest that Chinese controlling shareholders' preference 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 (search for similar items in EconPapers)
JEL-codes: G35 G38 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:29:y:2014:i:c:p:339-357

DOI: 10.1016/j.iref.2013.06.008

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