Author:
Amberger Harald J.,Robinson Leslie
Abstract
AbstractThe Tax Cuts and Jobs Act (TCJA) of 2017 marked a significant change in U.S. domestic and international tax policy, altering incentives for U.S. firms to own foreign assets. We examine the initial response of U.S. firms’ foreign acquisition patterns to the TCJA’s key reform provisions. We find a significant overall decrease in the probability that a foreign target is acquired by a U.S. firm after the reform, suggesting that the net effect of the TCJA was to reduce acquisitions abroad. Cross-sectional variation across target and acquirer characteristics points to the elimination of the repatriation tax and the TCJA’s global intangible low-taxed income (GILTI) regime as critically influencing cross-border acquisitions by U.S. firms. Specifically, U.S. acquirers with little foreign presence prior to the TCJA are more likely to acquire a foreign target, while U.S. acquirers are less likely to acquire profitable targets in low-tax countries. Results from our empirical analyses are consistent with the TCJA prompting fewer but more value-enhancing, less tax-motivated foreign acquisitions by U.S. firms.
Funder
Vienna University of Economics and Business
Publisher
Springer Science and Business Media LLC
Subject
General Business, Management and Accounting,Accounting
Reference69 articles.
1. 115th Congress. 2017. Tax Cuts and Jobs Act of 2017. Public Law Number 115–97. https://www.congress.gov/115/plaws/publ97/PLAW-115publ97.pdf. Accessed 11 Jan 2023.
2. Albertus, J.F., B. Glover, and O. Levine. 2022. Foreign investment of US multinationals: The effect of tax policy and agency conflicts. Journal of Financial Economics 144 (1): 298–327.
3. Allen, E.J., and S.C. Morse. 2019. Does parenting matter? U.S. parents, non-U.S. parents, and global firm taxes. Journal of Law, Finance, and Accounting 4 (2): 239–290.
4. Allison, P.D. 1999. Comparing logit and probit coefficients across groups. Sociological Methods & Research 28 (2): 186–208.
5. Allison, P.D. 2009. Fixed effects regression models. Thousand Oaks: Sage.
Cited by
1 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献