U.S. tax inversions and shareholder wealth effects

Elaine Laing, Constantin Gurdgiev, Robert B. Durand and Boris Boermans

International Review of Financial Analysis, 2019, vol. 62, issue C, 35-52

Abstract: We examine a sample of corporate inversions from 1993 to 2015 by firms active in the U.S. markets and find that shareholders experience positive abnormal returns in the short-run. In the long-run, inversions have a deleterious effect on shareholder wealth. The form of the inversion and country-pair differences in geographic distance, economic development and corporate governance standards are determinants of shareholder wealth. Furthermore, we find evidence of a negative and non-linear relation between CEO total return and long-run shareholder returns.

Keywords: Corporate inversions; CEO total returns; Taxation (search for similar items in EconPapers)
JEL-codes: G02 G34 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:62:y:2019:i:c:p:35-52

DOI: 10.1016/j.irfa.2019.01.001

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