Dividend payout and dual-class companies based on big data analysis

Abstract

With the advent of the era of large data, facing massive data, we can apply statistical methods to mining the value hidden in the data.My study shows that there is a positive and significant relation between dividend payout and dual-class shares, suggesting that dual-class firms are more likely to pay dividend than single class firms. The finding is consistent with agency theory since agency theory implies that dividend can be used to mitigate the agency conflicts between managers and minority shareholders. I argue that this is because analyst coverage can effectively discipline the behaviors of managers so that analyst coverage can be used as alternative agency control mechanism of dividend to alleviate agency conflicts between managers and minority shareholders.