Please use this identifier to cite or link to this item: http://hdl.handle.net/10125/51973

The Effect of Repatriation Taxes on Investment Efficiency

File SizeFormat 
HARC_2018_paper_144.pdf418.76 kBAdobe PDFView/Open

Item Summary

Title: The Effect of Repatriation Taxes on Investment Efficiency
Authors: Amberger, Harald
Samuel, David M. P.
Markle, Kevin
Keywords: Repatriation Taxes
International Taxation
Internal Capital Markets
Investment
Agency Frictions
show 1 moreMultinational Firms
show less
Issue Date: 01 Sep 2017
Abstract: This paper examines the effect of repatriation taxes on investment efficiency, which we define as a subsidiary's investment sensitivity to local growth opportunities. Based on a global sample of firms we provide evidence that subsidiaries invest less efficiently when their ultimate owner is resident in a worldwide tax system. We confirm our results using natural experiments in the UK and Japan, which both switched from a worldwide to a territorial tax system in 2009.
Our results suggest that repatriation tax costs reinforce agency conflicts, which distort firms' internal capital markets and lead to sub-optimal investment decisions.
URI/DOI: http://hdl.handle.net/10125/51973
Appears in Collections:08 Taxation (Tax)


Please contact sspace@hawaii.edu if you need this content in an ADA compliant alternative format.

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.