Repatriation Tax Costs and US Multinational Companies' Shareholder Payouts

• 成果类型: Article
• 署名作者: Nessa, Michelle L.
• 署名单位: Michigan State University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51633
• 发表日期: 2017
• 页码: 217-241
• 关键词: JOBS CREATION ACT; life-cycle theory; financial constraints; STOCK REPURCHASES; Dividend policy; INVESTMENT; cash; propensity; earnings; FIRMS

摘要

This paper examines whether and to what extent repatriation tax costs constrain U.S. multinational companies' (MNCs) distributions to shareholders. During the 1987-2004 sample period, I find that repatriation tax costs decrease U.S. MNCs' dividend payments, and the economic magnitude of the effect is substantial. I do not find evidence that repatriation tax costs decrease U.S. MNCs' share repurchases, on average. I find cross-sectional variation in the effect of repatriation tax costs on share repurchases based on U.S. MNCs' opportunities to fund repurchases through external borrowing and to minimize the incremental U.S. cash tax cost of repatriations. I do not observe an association between repatriation tax costs and U.S. MNCs' dividend payments or share repurchases during a more recent time period (2009-2014). This study contributes to our understanding of the impact of the current U.S. worldwide tax system on U.S. MNCs' real decisions and of the determinants of firms' payout policies.