Foreign Portfolio Investment and Shareholder Dividend Taxes

• 成果类型: Article
• 署名作者: Amiram, Dan; Frank, Mary Margaret
• 署名单位: Columbia University; University of Virginia
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51264
• 发表日期: 2016
• 页码: 717-740
• 关键词: institutional investors; equity; diversification; OWNERSHIP; cost; ACT

摘要

We investigate the effects of dividend taxes on foreign equity portfolio holdings. Based on the extension of an equilibrium model with risky assets to an international setting, we predict that a change in the tax rate on dividends of a country's domestic investors is positively related to changes in foreign investors' portfolio holdings in that country. The evidence from two research settings, which exploit changes in the national tax policies of different countries, supports this prediction. More generally, the model predicts that a foreign investor's equilibrium portfolio holdings in a country are negatively related to the dividend tax rate that she directly pays on assets in that country and positively related to the weighted-average dividend tax rate of worldwide investors in that country. Results from analyses using panel data provide empirical support for these predictions.