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A Study on the Dividends from government-invested institutes : Current Status and Evaluation

  • Journal of Regulation Studies
  • 2010, 19(1), pp.179-212
  • Publisher : 한국규제학회
  • Research Area : Social Science > Public Administration

Ki Young Kim 1,  Kyung-Jin Park 1,  Yoo, Young-Tae 2

1명지대학교
2연세대학교

Accredited

ABSTRACT

In terms of developing sources for revenue, it is meaningful to judge the reasonable level of dividend from government-invested institute and examine ways to expand the dividend given that the policy of tax cut has remained and fiscal spending has expanded. With reference to governmental dividend by government-invested institute under the jurisdiction of general account, the dividend surged from 336 BN Won in 2005 to 937.8 BN Won in 2008 and plunged back to 343.5 BN Won in 2009. To check whether each institute reserves a reasonable dividend policy, this paper identifies the ratio of a current revenue from dividend by calculating maximum profit available for dividend, points out problems in calculating profit available for dividend, and examines the extent to which tax burdens and fiscal deficits can be released by applying a reasonable dividend rate assumed. In the case of paying as much of dividend as payout ratio subject to sustainable growth rate, the ratio of maximum profit available for dividend to proper dividend amount is approximately 77.7% and the ratio of tax burden drops from 16.20% to 16.06%. Those figures indicate that comprehensive budget balance of 2009 has improved 24.3% more than that of 2008. There are some problems founded in the recent 5-year revenue on dividend paid from government-invested institute. First of all, a few of public enterprises in a financial sector hold major sources of total revenue on dividend. Second, the dividend payout ratios of government- invested institutes are extremely low. Lastly, regarding laws and regulations associated with dividend of government- invested institute, the ratio of retained amount is extremely high and the sources of dividend are based on profits occurred in the same year as dividend is paid. To resolve those problems, government- invested institutes take individual profitability and capital structure into account when they design the dividend policy.

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