5. Conclusion

relationship with the current corporate value but is a variable that determines the present

The upper part of each cell represents the estimation coefficient and the lower part represents the t value. \*, \*\*, and \*\*\* indicate statistical significance at the 10%, 5%, and 1% levels, respectively. The definitions of the variables are the same as

Variable (1) DIVOUT (2) ΔDIVOUT (3) DIVRATE (4) ΔDIVRATE

(�8.75) (�8.76) (�8.64) (�7.36)

(2.18) (1.68) (1.58) (1.41)

TANGi,t�<sup>1</sup> �1.06\*\*\* �0.99\*\*\* �1.03\*\*\* �0.97\*\*\*

LOSSi,t�<sup>1</sup> 0.12\*\* 0.05\* 0.04 0.03

Adj.R<sup>2</sup> 0.10 0. 10 0.10 0.10 # of obs 2194 2194 2194 2194 # of groups 1027 1027 1027 1027 F-statistics 8.98\*\*\* 8.76\*\*\* 8.83\*\*\* 8.81\*\*\*

First, columns (1)–(3) and columns (4)–(6) in Table 6 are the result of using DIVTA and nDIVTA as DIV variables, respectively. Column (1) and (2) are to estimate DIVTA and DIVTA \* NPF as the first steps for 2SLS, and (3) columns show the main analysis results using the variables estimated in columns (1) and (2). Similarly, columns (4) and (5) are to estimate mns (analysis results using the variables estimated in columns (6) is about main analysis. The results of the first stage, column (1) and (2), show that the dividend level of the previous period has a significant positive relationship with the dividend level of the current period at 1% level. In the second step, in contrast to the results in Table 5, the level of dividends does not affect the firm value. On the other hand, the dividend pressure of NPS has a negative effect on the corporate value. The results of column (6) using the variables of dividends does not affect the firm value. On the other hand, the dividend pressure of NPS has a negative effect on the corporate

Table 7 shows the results of the same analysis as Table 6 using the remaining DIV variables. Columns (1)–(4) are the second stages of 2SLS, and definition of DIV variable is different. Only in column (1), where dividend levels are measured by DIVOUT, the dividend pressure of the NPS has been found to have a negative impact on corporate value at the 10% level. However, in the case of the remaining variables, NPS's dividend pressure and corporate value are not related. Dividend level of the current period can be determined endogenously, but it is difficult to find a precedent study that mentions the problem of endogeneity on the change of the dividend level. In the case of changes in the level of dividends, I do not use 2SLS and applied only fixed-effect panel analysis. Although it is not shown in the table, the dividend pressure of the NPS is not related to firm value. In conclusion, in a few analyses, the dividend pressure of the NPS is found to be negative for firm value. However, in order to generalize this, the evidence of empirical analysis is lacking. In this study, I conclude that the dividend pressure

dividend level [15, 16].

68 Firm Value - Theory and Empirical Evidence

Table 7. Robustness test using 2SLS and panel analysis (2).

those in Table 2.

of the NPS is irrelevant to firm value.

This study investigated the effect of NPS dividend pressure on firm value. For the purpose of this study, we analyzed the Korean listed companies from 2011 to 2016. The dividend pressure of NPS was measured by using the intersection of the cash dividend level and whether or not NPS had a large amount of share. The level of cash dividend was measured by cash dividend rate relative to total assets, net income, and capital. The change variables of these variables were also considered. We constructed the test sample using PSM to reduce the self-selection bias.

The results show that the dividend pressure of NPS had no significant effect on firm value. However, there was a significant relation between dividend level and firm value. In addition, firms with large shareholdings of the NPS tended to have high corporate value. As a result, listed companies in Korea could consider increasing dividends as one of the ways to increase corporate value. This study is expected to provide useful information for future decision-making regarding voting rights related to dividends. It will also help guide the dividend policy of companies that are receiving investment from NPS. In recent years, as Korean corporations have increased their reserves, this research is expected to provide useful information to investors and managers who are interested in possible agency problems. This chapter analyzes the impact of cash dividend on corporate value using the external shock of NPS's dividend expansion pressure. Most of the previous studies have analyzed dividend and investment on the same line and analyzed the effect of these factors on firm value. This study solves the problem of bidirectional causality between dividend and firm value by using exogenous factors such as NPS's dividend pressure.

As a result, the dividend pressure of the NPS does not have a significant effect on firm value. On the other hand, there is a significant positive relation between dividend level and firm value and whether mass ownership of NPS has a significant positive effect on firm value. This study is meaningful to verify the direct effect of pension funds on behaviorism. In addition, this study has contributed to verifying the direct effect of corporate dividend increase on firm value using the external shock of NPS's dividend pressure.

This study has the following limitations. First, the proxy of the NPSon firm value. This study is meaningful to verify the direct effect of pension funds on behavior holdings of NPS and the cash dividend level. If a company with a large amount of the NPS pays a large dividend, it is difficult to distinguish whether the corporation voluntarily increases the dividend or increases the dividend by the pressure of the national pension. The solution to these limitations is to be handled in future research.
