Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act

• 成果类型: Article
• 署名作者: Dharmapala, Dhammika; Foley, C. Fritz; Forbes, Kristin J.
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; Harvard University; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2011.01651.x
• 发表日期: 2011
• 页码: 753-787
• 关键词: free cash flow; International investment; corporate governance; federal-grants; POLICY; aid; Repatriation; taxation; FIRMS

摘要

The Homeland Investment Act provided a tax holiday for the repatriation of foreign earnings. Advocates argued the Act would alleviate financial constraints by reducing the cost to U.S. multinationals of accessing internal capital. This paper shows that repatriations did not increase domestic investment, employment, or R&D-even for firms that appeared to be financially constrained or lobbied for the holiday. Instead, a $1 increase in repatriations was associated with a $0.60 to $0.92 increase in shareholder payouts. Regulations intended to restrict such payouts were undermined by the fungibility of money. Results indicate that U.S. multinationals were not financially constrained and were well-governed.