Dual Class Share Structures and Cash Dividends:Empirical Evidence Based on China's Concepts Stocks
Dual class shareholding exempts corporate founders from the threat of market control,and it is easy to criticize their self-interested behavior as it appears to infringe on the interests of small and medium-sized investors.This paper takes data from Chinese listed companies from 2008 to 2018 as the research object by which to theoretically analyse and empirically test the effect of the dual equity system on the cash dividends flowing to small and medium-sized investors,as well as the mechanisms of action.The results show that,compared with the single equity system,the dual equity system does not deliver more cash dividends to small and medium-sized investors,mainly due to the problem of capital appropriation caused by the abuse of rights.Heterogeneity analysis shows that the negative effect of the dual equity system on the interests of small and medium-sized investors is more obvious in firms with significant free cash flow and managerial rights.Further research finds that the managerial competence of the founders in maximizing company value can positively moderate the negative impact of the dual equity system on dividend acquisition by small and medium-sized investors.The research in this paper enriches the literature related to the localization of dual equity systems and provides policy insights for safeguarding the rights and interests of small and medium-sized investors.
dual class share structureinterest protection of minority shareholdercapital expenditureprincipal-agent problem
万方数据
