THE MODERATING EFFECTS OF SPLIT SHARE STRUCTURE REFORM ON THE RELATION BETWEEN DIVIDEND PREFERENCES AND SHARE SEGMENTATION SYSTEM OF CHINA LISTED FIRMS

This study investigates whether the relation between share segmentation system and dividend preferences is moderated by split share structure reform. Using a sample of Chinese listed firms, we determine the following: first, the split share structure reform negatively moderates the cash dividend preference of nonnegotiable shareholders. Moreover, the negative moderating effects of the reform cause legal person shareholders change their preferences from cash to stock dividends while state shareholders still prefer cash dividends. Finally, the reform changes the attitude of the second largest shareholders, from cooperating with to monitoring controlling shareholders, with these monitoring effects mainly coming from state shareholders.