Cash dividend policy, corporate pyramids, and ownership structure: Evidence from China

► We examine how the pyramidal ownership affects the dividend policies in China. ► The state-controlled firms pay higher dividends than privately owned firms. ► The privately owned firms pay lower dividends due to more capital-constraint. ► A negative relation exists between the length of the control chain and dividends. ► The finding shows the use of the internal capital markets in firms under pyramids.