| Summary: | 碩士 === 中原大學 === 國際商學碩士學位學程 === 104 === In this research, tunneling effect is identified as a phenomenon that the controlling shareholders may extract the firm’s capital into their own pocket through high dividend payout policy, which may risk the company future growth as well as the benefit of minority shareholders.
Tunneling has been revealed as a common practice in those Emerging markets where the government plays an important role on controlling the business. Today, Vietnam is the emerging market, with the securities market has been introduced to public for almost two decades. As expectation, securities market has become remarkable capital mobilization channel to push up their national economic and maintain a high development speed.
This research aims to investigate the existence of tunneling practice on the dividend payout policy of Vietnamese listed companies. The empirical findings show that the government-controlled companies, the companies with high concentrated ownership or with recent IPO or right issues activity will have higher dividend yield. These findings indicate that the dividends may be used by controlling shareholders as a means of tunneling.
In addition, as recognition the advantage on investment and growth which state-owned organizations often enjoy in Vietnam market, this study also tries to find out if the government-controlled companies may sacrifice their investment opportunities by using the high-dividend policy to earn cash which then serves for other purposes. The outcome documents that the government seems to keep their tunneling practice under the control, in order to avoid the harmful effect on company’s growth as well as their long-term benefits from the business.
Keywords: Tunneling effect, dividend policy, Vietnamese securities market, government-controlled.
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