Minority Shareholder Activism and Corporate Dividend Policy : Evidence From China

Minority shareholder activism (MSA) on online interactive platforms is a new form of corporate governance in China. This paper investigates whether and how dividend-related MSA affects corporate dividend policies. We find listed firms are more likely to pay dividends and raise payout ratios with MSA. Our baseline findings are robust to a variety of robustness checks. We establish a causal relationship between MSA and future dividend payouts, with both instrumental variable approach and PSM-DID approach, and we provide evidence to show the increasing effect of MSA can be explained by joint monitoring, compulsory responses, and regulator attention. Our focused MSA is different from the voting rights of minority shareholders. Overall, our findings suggest that minority shareholders can effectively monitor management when they are empowered with voice in the age of information