The Influence of Corporate Governance on Dividend Distribution Policy

Dividend distribution is not only crucial for shareholder interests and corporate value, but also serves as a key driver in advancing capital market reforms. Existing literature on the relationship between corporate governance and dividend distribution policy focused on either single corporate governance features​ or ​a single form of dividend distribution policy.​ This study investigates the impact of corporate governance quality on dividend distribution policy using data from A-share listed companies in China spanning 2013 to 2023. The findings reveal that improvements in corporate governance significantly promote the adoption of cash dividend and share repurchase policy, with results passing robustness tests. Further analysis reveals heterogeneity in the effects of corporate governance on dividend policy across different ownership structures, policy environments, enterprise sizes, and growth opportunities. Therefore, to boost investor confidence and enhance the vitality of the capital markets, it is imperative to improve corporate governance structures, rationally guide dividend distribution behaviors, and strengthen market regulation.