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세제 변화가 기업의 투자 및 배당 결정에 미치는 영향(The impact of tax-regime change on investment and dividend policies)

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Title 세제 변화가 기업의 투자 및 배당 결정에 미치는 영향(The impact of tax-regime change on investment and dividend policies)
Similar Titles
Material Type Reports
Author(Korean)

남창우

Publisher

세종 : 한국개발연구원

Date 2015-12
Series Title; No 정책연구시리즈 / 2015-20
ISBN 979-11-5932-171-9
Pages 107
Subject Country South Korea(Asia and Pacific)
Language Korean
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Economy < Direct Investment
Holding 한국개발연구원; KDI국제정책대학원
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Abstract

This paper shows that while the Korean corporate tax rate is relatively low compared to other major economies, the ratio of corporate tax income to GDP is relatively high. In particular, as the dividend capacity of listed companies, i.e. profitability and cash-flow, deteriorates the corporate investment in Korea could shrink on the reduction in the dividend tax rate. In addition, it is shown using a theoretical model that the reduction on the corporate tax rate affects the investment and dividend policy the most by allowing managers to take advantage of or Tunnelings from the corporate cash holdings. However, the dividend tax cut expands the dividend income but has a negative effect on the whole economy. On the other hand, the impact of the corporate tax cut increases under corporate governance that does not have managerial Tunnelings because healthy governance without managerial private incentives reduces the relationship between investment and cash equivalents, and dividends and cash equivalents. Thus, policy makers should focus on improving the fundamental business environment rather than short-term stimulus such as a temporary corporate income tax cut or dividend tax cut. Finally, this paper investigates the impact of financial variables and corporate tax cuts on dividend and investment policies by using a reduced model. The empirical results show that corporate cash holdings, cash flow, sales growth and average effective tax rate influence corporate investment. Also, it is shown that the dividend payout ratio at the previous period, cash flow, and average effective tax rate affect the dividend payout ratio.