Investment and Capital Constraints: Repatriations Under the American Jobs Creation Act

• 成果类型: Article
• 署名作者: Faulkender, Michael; Petersen, Mitchell
• 署名单位: University System of Maryland; University of Maryland College Park; Northwestern University; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhs092
• 发表日期: 2012
• 页码: 3351
• 关键词: REINVESTED FOREIGN EARNINGS; cash flow; financing constraints; debt

摘要

The American Jobs Creation Act (AJCA) significantly lowered U.S. firms' tax cost when accessing their unrepatriated foreign earnings. Using this temporary shock to the cost of internal financing, we examine the role of capital constraints in firms' investment decisions. Controlling for the capacity to repatriate foreign earnings under the AJCA, we find that a majority of the funds repatriated by capital-constrained firms were allocated to approved domestic investment. Although unconstrained firms account for a majority of repatriated funds, no increase in investment resulted. Contrary to other examinations of the AJCA, we find little change in leverage and equity payouts.