Generalized Financial Distribution Theory

Primary distribution is always considered as the research object of political economics as well as macroeconomics.Little scholar takes it as a financial topic to lucubrate.The research in economics is systematic,however,it often stays in the macro and theoretical level and dwells little on how to implement the theoretical findings,such as distribution according to work or distribution according to factors of production,in enterprise level.Thus,it cannot give more direct help to the micro distribution practice in an enterprise which is the main place primary distribution occurs.Because company is a typical type of enterprise,it will form a solid basis to solve the primary distribution problem in all types of enterprises by studying the micro distribution process in a company.To our regret,although primary distribution should be the research object of finance at microcosmic field,the fact is the lack of primary distribution theory in finance.The dividend policy theories in the ruling finance,i.e.,theories focused on how to carve up the net profit between stockholders and their company,are special financial distribution theories.They are formed in a special historical background that material capital is the decisive resource basic of a company and the given hypothesis that stock holders bear all the residual risks.They ignore the relation of value creation and value distribution so that the holders of value creation factors other than stockholders cannot receive the corresponding income fairly.In fact,their rights and interests are often be harmed by stockholders which result in lots of distribution conflicts.We notice that a great change has occurred in the resource basis of modern company and more attention has been paid to stakeholders than just to stockholders.Under the circumstances,the special financial distribution theory cannot reduce the distribution conflicts.In fact,it is not the aim of the theory.By conducting a comprehensive analysis of the special financial distribution theory,we come up to the conclusion that the expansion of it to generalized financial distribution theory is urgent to the requirement of the times.According to the newly built theory,the benefits of all the basic factors are united by the newly created value,i.e.,V+M of the total social value named in Political Economics.The newly created value is divided accords the way it is created.Thus,the newly built theory aims on the maximization of stakeholder's interests,weakens the distribution conflicts and helps to achieve the goal of a long and sound development of the company.This paper is divided into 10 chapters.The research background,the paper review,the research significance,the analytical methods,the contributions and deficiencies of the paper are included in the introduction part.Chapter 2 gives a comprehensive analysis on the special financial distribution theory from subjective,objective and theoretical level respectively.Chapter 3 puts forward a theory of"5-basic-factors" of value creation which holds that value is created under the consolidated action of labor,human capital,financial capital,message,and public environment.Chapter 4 constructs the framework of generalized financial distribution theory,the theory bases of which are contract theory,game theory,the financial theory of stakeholders as well as embedded theory.In the process of constructing the generalized financial distribution theory,we make the least assumptions.The first is that a company is an entity instead of a legal fiction.The second is that man is a social man with bounded rationality.Chapter 5 discusses the distribution conflicts.Chapter 6 puts forward the way by which the basic factor to participate the value distribution.Chapter 7 probes into the rational range for factor shares as well as the decision of distribution contract under certain conditions after discussing several basic theoretical problems concerning distribution according to factors.The distribution order is discussed in chapter 8.Take the generalized financial distribution theory as a tool,we empirically analyze the primary distribution structure of companies listed on Shanghai Security Exchange or Shenzhen Security Exchange in chapter 9 and bring forward some policy-making suggestions,Chapter 10 concludes the paper and points out the limitation and the future research direction.The paper innovates and contributes mainly in the following 6 aspects:Firstly,the generalized financial distribution theory based on value creation and factor contributions fills the gaps in finance and enriches the financial theory and practice.Secondly,we put forward a theory of "5-basic-factors" of value creation.Thirdly,the concept of rational range for factor shares is introduced to the research on primary distribution so that the accurate measure on factor contribution does not become a fatal obstacle to the financial distribution research.Fourthly,we put forward the opinion that property,organization form of a company,factor contribution,risks a certain factor bears as well as incentives should be considered comprehensively to make a fair arrangement for residual value distribution.In the same time,we also points out 4 key points in the process of residual distribution.Fifthly,we also put forward the methods to determine the distribution order.Lastly,we provide an empirically analysis on the primary distribution structure using generalized financial distribution theory and give some suggestions on Chinese primary distribution system reform.