Escape from the USA: Government debt-to-GDP ratio, country tax competitiveness, and US-OECD cross-border M&As

• 成果类型: Article
• 署名作者: Gan, Ying; Qiu, Buhui
• 署名单位: Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam; University of Sydney
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-019-00216-w
• 发表日期: 2019
• 页码: 1156-1183
• 关键词: government debt-to-GDP ratio; country tax competitiveness; Cross-border mergers and acquisitions; Tax avoidance; two-stage least-squares regressions

摘要

We study how differences in target country-US tax competitiveness influence acquirers' share price reactions to US cross-border acquisitions, the tax savings after acquisition completion, and the US cross-border acquisition deal flows. We employ two-stage least-squares regressions and use the fitted component of the government debt-to-GDP ratio difference between the US and a target country as a proxy for the target country-US tax-competitiveness difference. Using a sample of US acquisitions of targets in other OECD countries, in which around one-tenth of the target firms are publicly listed firms while the rest are private and subsidiary firms, our findings suggest that tax arbitrage (a) increases the shareholder wealth of US acquirers and (b) is likely an important driver of US-OECD cross-border acquisition deal flows.