Are corporate inversions good for shareholders?

• 成果类型: Article
• 署名作者: Babkin, Anton; Glover, Brent; Levine, Oliver
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; Carnegie Mellon University; University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2017.07.004
• 发表日期: 2017
• 页码: 227-251
• 关键词: CORPORATE GOVERNANCE; Fiduciary duty; Shareholder conflicts; Tax-clientele effects; Mergers and Acquisitions

摘要

Corporate inversion, the process of redomiciling for tax purposes, reduces corporate income taxes, but it imposes a personal tax cost that is shareholder-specific. We develop a model, incorporating the corporate tax benefits and personal tax costs, to quantify the return to inversion for different shareholders. Foreign and tax-exempt investors, along with the chief executive officer, disproportionately benefit. We show that an inversion simultaneously reduces the wealth of many taxable shareholders. The model illustrates an agency conflict in which heterogeneity in personal taxes generates a wealth transfer between shareholders. Furthermore, personal taxes offset the loss in government revenue by 39%. (C) 2017 Elsevier B.V. All rights reserved.