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

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  • Liu, Chunyan
  • Uchida, Konari
  • Yang, Yufeng
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    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.

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    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 29 (2014)
    Issue (Month): C ()
    Pages: 339-357

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    Handle: RePEc:eee:reveco:v:29:y:2014:i:c:p:339-357

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    Web page: http://www.elsevier.com/locate/inca/620165

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    Keywords: Cash dividends; Controlling shareholder; Non-publicly tradable shares; Split-share structure reform; China;

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