Repatriation Taxes and Foreign Cash Holdings: The Impact of Anticipated Tax Reform

• 成果类型: Article
• 署名作者: De Simone, Lisa; Piotroski, Joseph D.; Tomy, Rimmy E.
• 署名单位: Stanford University; University of Chicago
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy124
• 发表日期: 2019
• 页码: 3105
• 关键词: US FIRMS HOLD; INVESTMENT; earnings; corporations; Dividends; CONSEQUENCES; incentives; governance; location; taxation

摘要

We examine whether an anticipated reduction in future repatriation taxes affects the amount of cash U.S. multinationals hold overseas. We find that the expected benefits of a repatriation tax reduction are positively associated with accelerated accumulations of global cash holdings once Congress proposed legislation. Additional tests examining domestic and foreign corporations, voluntary disclosures of foreign cash, and corporate payout behavior support our conclusion that observed increases in excess global cash are driven by changes in foreign cash. We also document that U.S. multinationals accumulating excess cash engage in complementary organizational and financial reporting activities designed to maximize expected tax benefits.