중국 국유기업의 배당과 투자 및 기업지배구조의 상호관계

Abstract

Dividend policy has long been a subject of detailed study in advanced market economies. specifically, the agency theory provide the main rationale for distribution of surplus cash, through dividends or share buy-backs. Jensen(1986) noted that dividends may mitigate agency costs by distributing free cash flows that otherwise would be spent on unprofitable projects by the management. It is argued that dividends expose firms to more frequent scrutiny by the capital markets as dividend payout increase the likelihood that a firm has to issue new common stock more often. On the other hand, scrutiny by the markets helps alleviate opportunistic management behavior and agency costs. China's SOEs reform in the 1980s started with profit retention policies. However, as more profit was retained by SOEs, government revenue from enterprises declined sharply in the 1980s. To fix the problems, the government adopted "contracting responsibility system" in late 1980s. Unfortunately, it didn't work, either. SOEs as a whole were in poor financial situation in early 1990s. What the government could collect was not much, while the need for new capital injection was perceived as urgent and large. In that difficult situation, the taxation reform was adopted. It stated that the part that goes to the government is now fixed as tax at a unified rate, while anything left belongs to the enterprise. As a result, since the taxation reform in 1994, most SOEs have not paid any significant dividend to the government in China. In recent years, however, the SOEs have turned from money losers into money makers, not only as a result of economic reform but also thanks to the suspension of dividend collection by the State. This study focuses on the linkages between China's SOEs dividend policies and investment and corporate governance. Specifically, this study explores the recent plan of SOEs paying dividends to the government, and analyzes its effect on not only the SOEs, but also the China macro-economy.