Does US foreign earnings lockout advantage foreign acquirers?

• 成果类型: Article
• 署名作者: Bird, Andrew; Edwards, Alexander; Shevlin, Terry
• 署名单位: Carnegie Mellon University; University of Toronto; University of California System; University of California Irvine
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.06.004
• 发表日期: 2017
• 关键词: cross-border mergers; M-AND-AS; Repatriation taxes; acquisitions; INVESTMENT; diversification; determinants; taxation; cash

摘要

We hypothesize and find evidence consistent with foreign firms being tax-favored acquirers of U.S. targets with greater locked-out earnings because they can avoid the U.S. tax on repatriations. This effect is economically significant; a standard deviation increase in lockout is associated with a 12% relative increase in the likelihood that an acquirer is foreign. We also find evidence that foreign acquirers of the target firms are more likely to be residents of countries that use territorial tax systems, as the tax advantages for a foreign firm acquiring a U.S. target with locked-out earnings are even greater for these acquirers. (C) 2017 Elsevier B.V. All rights reserved.