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Government subsidies, dividend and stock market refinancing of Chinese firms

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  • Huang, Wei

Abstract

I show that government subsidies facilitate recipient firms’ dividend payout and stock market refinancing in China where there is a mandatory requirement of cash dividend payout for listed firms intending to make seasonal equity offerings. These effects are particularly strong among more financially constrained firms. Although seemingly counter-intuitive, we show that subsidized firms are more likely to make seasonal equity offerings. My findings shed some light on the joint effects of public subsidies and corporate governance policies in emerging market setting.

Suggested Citation

  • Huang, Wei, 2020. "Government subsidies, dividend and stock market refinancing of Chinese firms," Finance Research Letters, Elsevier, vol. 37(C).
    • Handle: RePEc:eee:finlet:v:37:y:2020:i:c:s154461231930916x
    DOI: 10.1016/j.frl.2019.101345
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    Cited by:

    1. Li, Xiao-Lin & Li, Jingya & Wang, Jia & Si, Deng-Kui, 2021. "Trade policy uncertainty, political connection and government subsidy: Evidence from Chinese energy firms," Energy Economics, Elsevier, vol. 99(C).
    2. Cao, Jerry & Wang, Hanyang & Zhou, Sili, 2022. "Soft activism and corporate dividend policy: Evidence from institutional investors site visits," Journal of Corporate Finance, Elsevier, vol. 75(C).
    3. Li, Xiao-Lin & Qiu, Guojing & Ding, Hui, 2022. "The impact of exchange rate policy uncertainty shock on Chinese energy firms' risk-taking," Energy Economics, Elsevier, vol. 105(C).

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    More about this item

    Keywords

    Subsidies; Dividend; SEO; China;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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