Journal of Accounting, Finance & Management Strategy




Volume 16, Number 2, December 2021

The Dividend Payout Policy in Chinese Listed Firms


This paper examines whether political connections and information asymmetry would have impacts on dividend payment, respectively, and whether information asymmetry could moderate the relationship between political connections and payout policy. We used a sample of Chinese listed firms from 2008 to 2015. The results show that firms with political connections have higher dividend payouts. The firm with higher information asymmetry leads to a lower dividend payout. Moreover, we find that politically connected firms with higher information asymmetry tend to lower the dividend payouts, indicating that there is a moderating effect of information asymmetry on the relationship between political connection and payout policy. The results may help explain why the effect of political connection on firms remain uncertain. It turns out that the government may have different strategies towards connected firms under different levels of information asymmetry.

Keywords: Political Connection, Information Asymmetry, Dividend Policy

JEL Classification: G30, G32