Influence of Institutional Ownership on Cash Dividend Policy of China Listed Companies

摘要

According to agency theory, cash dividends can effectively restrain the self-interest behavior of corporation managers and prevent managers to hurt the interest of stockholders. If institutional investors have enough stockholdings, they perhaps can exert influence on corporation decisions and make managers distribute more cash dividends. By the construction of cash dividend decision model based on the protection of stockholders' interest, this paper uses the data of China manufacturing listed companies from 2001 to 2003 to make empirical study. We find that in China listed companies, institutional ownership has positive relation with the payout of cash dividends. Finally, this paper points that an effective way to deal with the current low cash dividend policy of China listed companies is to develop institutional investors and increase their stockholdings percentage.