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Korean J Financ Stud > Volume 47(5); 2018 > Article
Korean Journal of Financial Studies 2018;47(5):779-821.
DOI: https://doi.org/10.26845/KJFS.2018.10.47.5.779    Published online October 31, 2018.
Demand for Increased Dividends by the National Pension Service and Firm Investment Efficiency
Jung-Hee Noh
국민연금의 배당압력과 기업의 투자효율성
노정희
울산대학교
Abstract
We examine the impact of dividend pressure in the National Pension Service (NPS) on investment efficiency using a study conducted on Korean listed companies from 2011 to 2016 and construct a verification sample using Propensity Score Matching. We found that the dividend pressure of the NPS tends to hinder investment efficiency. In particular, this pressure has not been effective in improving the investment efficiency through restraining overinvestment. Despite the dividend pressure in the NPS, companies with a tendency to overinvest increased their investments. However, the dividend pressure is effective in improving investment efficiency only for companies with high free cash flow. The lower the quality of financial reporting, the higher the growth potential, and the greater the negative impact of the dividend pressure on investment efficiency. In addition, since 2014, when the Enforcement Decree of the Capital Market Law amendment and the taxation of reserve funds were applied, the negative effect of dividend pressure has been strengthened. This study is expected to be useful in decision making regarding the exercising of NPS voting rights and the dividend policy of companies receiving investment from NPS.
Key Words: 국민연금투자,배당정책,투자효율성,투자의사결정,국민연금 의결권행사,National Pension Service,Dividend Policy,Investment Efficiency,InvestmentDecision,Exercising of Voting Rights
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