Capital gains taxation and the cost of capital: Evidence from unanticipated cross-border transfers of tax base

• 成果类型: Article
• 署名作者: Huizinga, Harry; Voget, Johannes; Wagner, Wolf
• 署名单位: Tilburg University; Centre for Economic Policy Research - UK; University of Mannheim; University of Oxford; Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.04.014
• 发表日期: 2018
• 页码: 306-328
• 关键词: capital gains taxation; cost of capital; International takeovers; Takeover premium

摘要

In a cross-border takeover, the tax base associated with future capital gains is transferred from target shareholders to acquirer shareholders. Cross-country differences in capital gains tax rates enable us to estimate the discount in target valuation on account of future capital gains. We estimate that a 1 percentage point increase in the capital gains tax rate reduces the value of equity by around 0.3%, which suggests that the capital gains tax significantly raises firms' cost of capital. Furthermore, we find that the implied capital gains tax burden is higher at times of high economic growth and low stock market valuation. (C) 2018 Elsevier B.V. All rights reserved.