Skip to main content Skip to main navigation menu Skip to site footer
  • Register
  • Login
  • Language
    • English
    • Deutsch
    • Język Polski
    • Español (España)
    • Italiano
    • Français (Canada)
    • Čeština
    • Français (France)
    • Hrvatski
    • Srpski
    • Українська
  • Menu
  • Home
  • Forthcoming
  • Current
  • Archives
  • Ethics
  • Announcements
  • About
    • About the Journal
    • Submissions
    • Editorial Team
    • Privacy Statement
    • Contact
  • Register
  • Login
  • Language:
  • English
  • Deutsch
  • Język Polski
  • Español (España)
  • Italiano
  • Français (Canada)
  • Čeština
  • Français (France)
  • Hrvatski
  • Srpski
  • Українська

Copernican Journal of Finance & Accounting

CAN MANDATORY DIVIDEND POLICY REDUCE THE AGENCY COST OF LISTED COMPANIES? MODEL ANALYSIS AND EMPIRICAL TEST IN CHINA
  • Home
  • /
  • CAN MANDATORY DIVIDEND POLICY REDUCE THE AGENCY COST OF LISTED COMPANIES? MODEL ANALYSIS AND EMPIRICAL TEST IN CHINA
  1. Home /
  2. Archives /
  3. Vol. 8 No. 1 (2019) /
  4. Articles

CAN MANDATORY DIVIDEND POLICY REDUCE THE AGENCY COST OF LISTED COMPANIES? MODEL ANALYSIS AND EMPIRICAL TEST IN CHINA

Authors

  • Qin Hailin Tianjin Polytechnic University https://orcid.org/0000-0001-7792-3119
  • Zhang Jingxu Tianjin Polytechnic University https://orcid.org/0000-0002-5497-0227

DOI:

https://doi.org/10.12775/CJFA.2019.003

Keywords

mandatory dividend, agency cost, dividend policy, mixed strategy equilibrium, difference-in-difference model

Abstract

In this research, the mixed strategy complete information static game was adopted to explain the effect of mandatory dividend policy on agency cost, and Chinese mandatory dividend policy introduced in 2011was regarded as the institutional background, and whether mandatory dividend policy can reduce the agency cost of listed companies as an accidental impact was studied. Empirical test indicates that mandatory dividend policy significantly inhibits the agency cost of enterprises. Further research finds that the mandatory dividend policy has a better effect on reducing agency costs for the companies listed on the main board and those with normal dividends, while it has no significant effect on restraining agency costs for the companies with micro-dividends and small and medium-sized boards. The study supports the dividend agency cost theory and provides empirical evidence for the regulating departments to improve the follow-up policy of capital market governance.

References

Bao, Y., & Tianrong, Y. (2014). Intervention of Institutional Investors, Agency Problem and Corporate Dividend. Journal of Shanxi University of Finance and Economics, 36(06), 90–101.

Bao, Y., Wanwei, & Chow, D. (2018). Cash Dividend Distribution under R&D Investment Decision: Suppression or Catering. Also on the Paradox of Regulation of “Semi-compulsory Dividend Policy”. Journal of Shanxi University of Finance and Economics, 40(03), 94–109.

Bao, Y., & Tianrong, Y. (2014). Intervention of Institutional Investors, Agency Problem and Corporate Dividend. Journal of Shanxi University of Finance and Economics, 36(06), 90–101.

Changqing, L., Zhihua, W., & Shinong, W. (2010). Market Response to Semi-compulsory Dividend Policy. Economic Research, 45(03), 144–155.

Genfu, F., & Juehang, Z. (2012). Manager’s Compensation, On-the-job Consumption and Corporate Performance: From the Perspective of Cooperative Game Analysis. China’s Industrial Economy, 06, 147–158.

Guojie, Y., & Yuyu, Z. (2018). Semi-mandatory Dividend Sharing Policy and Earnings Management of Refinancing Enterprises: Evidence from PSM. Journal of Nanjing Audit University, 15(05), 75–85; 93.

Guoling, Q. (2014). Semi-mandatory Dividend Sharing Policy, Adverse Selection and Dividend Tunneling. Investment Research, 33(10), 118–131.

Guoling, Q., Huan, L., & Ziwei, Z. (2017). The Paradox of Cash Dividend Policy of GEM Listed Companies: An Explanation Based on Dividend Tunneling Theory. China’s Economic Issues, 02, 68–79.

Hanming, Y. (2008). Empirical analysis of equity concentration, cash dividend and enterprise value. Financial Economy, 08, 67–72.

Haoran, X., & Guanmin, L. (2018). The Corporate Governance Function of Dividends: An Empirical Test Based on Compulsory Dividends of Central Enterprises. Journal of Central University of Finance and Economics, 04, 53–62.

Jing, L., & Debo, J. (2017). Demand for refinancing, regulatory pressure and cash dividend. Audit and Economic Research, 32(02), 88–97.

Juanjuan, H., & Yifeng, S. (2007). Who does the dividend policy of listed companies cater to? Empirical data from Chinese listed companies. Accounting research, 08, 36–43; 95.

Lili, Z. (2018). The Role of Major Shareholders in Directional Additional Issuance and Acquisition: Support or Benefit Transfer: An Empirical Study Based on the Merger and Acquisition of Non-listed Companies by Listed Companies. Journal of Shanxi University of Finance and Economics, 40(07), 82–97.

Modigliani, F., & Miller, M.H. (1961). Dividend policy, growth, and the valuation of shares. Journal of Business, 34(4), 411–433.

Qingsong, A. (2012). Study on the Present Situation and Trend of Dividend Sharing of Chinese Listed Companies. Stock Market Report, 11, 15–19.

Tao, Z., & Deyou, W. (2007). Cash Dividend: Mitigating Agency Problem or Major Shareholder Exploitation: A Study from the Perspective of Final Ownership Structure. Journal of Shanxi University of Finance and Economics, 08, 97–102.

Xing, L., Weirong, T., & Ning, L. (2016). Semimandatory Dividend Policy, Corporate Governance and Cash Dividend Policy. Nankai Management Review, 19(05), 104–114.

Yaoting, H., & Mahong (2017). Agency Cost, Semi-mandatory Dividend and Corporate Value: Empirical Evidence from Chinese A-share Listed Companies. Journal of Guizhou University of Finance and Economics, (04),76–83.

Yan, C., Xin, L., & Mengshun, L. (2015). Research on the Effectiveness of Semi-mandatory Dividend Policy from the Perspective of Cash Dividend Catering, Refinancing Demand and Enterprise Investment-Investment Efficiency. Accounting Research, 11, 69–75; 97.

Yan, Y., & Chunfei, W. (2014). Economic consequences and potential problems associated with refinancing and dividend policy. China Accounting Review, 12(01), 43–66.

Yi, Y., & Yifeng, S. (2004). Cash Dividend: Transferring Profit Signal or Supervising Governance Function. China Accounting Review, 01, 61–76.

Yinguo, L. (2008). An Empirical Study on Dividend Policy Effectiveness of Listed Companies in China. Economic Management, 14, 26–33.

Yinguo, L., Chen, Z., & Sumei, R. (2014). Research on the Effect of Agency Cost Control of Cash Dividend Based on Semi-mandatory Dividend Sharing. Audit and Economic Research, 29(05), 59–68.

Yunling, C. (2014). Study on the Implementation Effect of Semi-compulsory Dividend Policy. Financial Research, 08, 162–177.

Yinguo, L., Chen, Z., & Sumei, R. (2014). Research on agency cost control effect of cash dividend based on semi-mandatory dividend distribution. Audit and economic research, 29(05), 59–68.

Yong, S., & Sihao, L. (2018). Research on Related Party Transactions, Heterogeneity of Institutional Investors and Risk of Stock Market Crash. China Soft Science, 04, 123– 131.

Zhihua, W., Yuhui, W., & Changqing, L. (2012). Institutional Investor Ownership and Cash Dividend Policy of Chinese Listed Companies. Stock Market Report, 10, 40–47; 60.

Zhihua, W., Maoliang, L., & Changqing, L. (2014). Semi-compulsory Dividend policy and Dividend-sharing Behavior of Chinese Listed Companies. Economic Research, 49(06), 100–114.

Zhihua, W., Changqing, L., Yuhui, W., & Jiajia, H. (2017). Semi-mandatory policy, refinancing motivation and classical dividend theory: Empirical research based on dividend agency theory and signal theory. Accounting Research, 07, 55–61; 97.

Zhiqiang, W., & Weiting, Z. (2012). Financial flexibility, refinancing options and dividend catering strategies of listed companies. Management World, 07, 151–163.

Zuoping, X., & Zhongqin, S. (2012). Is cash dividend a tool of “tunneling” or a mask of “tunneling”? Empirical evidence from Chinese listed companies. Journal of Management Engineering, 26(02), 77–84.

Copernican Journal of Finance & Accounting

Downloads

  • PDF

Published

2019-06-27

How to Cite

1.
HAILIN, Qin and JINGXU, Zhang. CAN MANDATORY DIVIDEND POLICY REDUCE THE AGENCY COST OF LISTED COMPANIES? MODEL ANALYSIS AND EMPIRICAL TEST IN CHINA. Copernican Journal of Finance & Accounting. Online. 27 June 2019. Vol. 8, no. 1, pp. 59-101. [Accessed 5 July 2025]. DOI 10.12775/CJFA.2019.003.
  • ISO 690
  • ACM
  • ACS
  • APA
  • ABNT
  • Chicago
  • Harvard
  • IEEE
  • MLA
  • Turabian
  • Vancouver
Download Citation
  • Endnote/Zotero/Mendeley (RIS)
  • BibTeX

Issue

Vol. 8 No. 1 (2019)

Section

Articles

Stats

Number of views and downloads: 1096
Number of citations: 0

Search

Search

Browse

  • Browse Author Index
  • Issue archive

User

User

Current Issue

  • Atom logo
  • RSS2 logo
  • RSS1 logo

Information

  • For Readers
  • For Authors
  • For Librarians

Newsletter

Subscribe Unsubscribe

Language

  • English
  • Deutsch
  • Język Polski
  • Español (España)
  • Italiano
  • Français (Canada)
  • Čeština
  • Français (France)
  • Hrvatski
  • Srpski
  • Українська

Tags

Search using one of provided tags:

mandatory dividend, agency cost, dividend policy, mixed strategy equilibrium, difference-in-difference model

cross_check

The journal content is indexed in CrossCheck, the CrossRef initiative to prevent scholarly and professional plagiarism

Up

Akademicka Platforma Czasopism

Najlepsze czasopisma naukowe i akademickie w jednym miejscu

apcz.umk.pl

Partners

  • Akademia Ignatianum w Krakowie
  • Akademickie Towarzystwo Andragogiczne
  • Fundacja Copernicus na rzecz Rozwoju Badań Naukowych
  • Instytut Historii im. Tadeusza Manteuffla Polskiej Akademii Nauk
  • Instytut Kultur Śródziemnomorskich i Orientalnych PAN
  • Instytut Tomistyczny
  • Karmelitański Instytut Duchowości w Krakowie
  • Ministerstwo Kultury i Dziedzictwa Narodowego
  • Państwowa Akademia Nauk Stosowanych w Krośnie
  • Państwowa Akademia Nauk Stosowanych we Włocławku
  • Państwowa Wyższa Szkoła Zawodowa im. Stanisława Pigonia w Krośnie
  • Polska Fundacja Przemysłu Kosmicznego
  • Polskie Towarzystwo Ekonomiczne
  • Polskie Towarzystwo Ludoznawcze
  • Towarzystwo Miłośników Torunia
  • Towarzystwo Naukowe w Toruniu
  • Uniwersytet im. Adama Mickiewicza w Poznaniu
  • Uniwersytet Komisji Edukacji Narodowej w Krakowie
  • Uniwersytet Mikołaja Kopernika
  • Uniwersytet w Białymstoku
  • Uniwersytet Warszawski
  • Wojewódzka Biblioteka Publiczna - Książnica Kopernikańska
  • Wyższe Seminarium Duchowne w Pelplinie / Wydawnictwo Diecezjalne „Bernardinum" w Pelplinie

© 2021- Nicolaus Copernicus University Accessibility statement Shop