Abstract

The purpose of this thesis is to examine the effects of overseas cross-listing on Chinese companies’ dividend policy and to present evidence on the prevalence of the bonding theory. We believe that by cross-listing, Chinese companies bond themselves to a well-developed capital market with a more stringent legislation environment and therefore facilitate the improvement of their corporate governance. We hypothesize that cross-listing has a positive effect on the corporate governance, which results in a higher propensity of dividend payments. We collect data on all dual-listed and multiple-listed Chinese companies listed on the Hong Kong stock exchange, Singapore stock exchange, NYSE, or NASDAQ from 1993 to 2014. We use two samples to conduct the analyses: a full sample covering all cross-listed and non-cross-listed Chinese public firms, and a subsample containing all the cross-listed firms with their propensity score-matched non-cross-listed firms. The results for the full sample indicate more dividends per share, a higher dividend payout ratio, and a higher likelihood to pay cash dividends in cross-listed firms, while the results for the matched sample only suggests a higher dividend payout ratio in cross-listed firms compared to their counterparts. The results also reveal that Chinese cross-listed companies pay more dividends to overseas investors than domestic investors and the issuance of the Corporate Governance Code in 2002 improved corporate governance in Chinese companies.