Internal capital market inefficiencies, shareholder payout, and abnormal leverage
Jimmy Downes and
Eric T. Rapley
Journal of Corporate Finance, 2017, vol. 43, issue C, 39-57
•We examine internal capital market inefficiencies and U.S. multinational firms' return of capital to shareholders.•The relation between cash and shareholder payouts differs between cash held domestically or by foreign subsidiaries.•The relation between foreign cash and total payout is negative for weak financial-health firms.•However, the relation between foreign cash and total payout is positive when access to external capital is less costly.•Firms with foreign cash and shareholder payouts have abnormal amounts of leverage.
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:43:y:2017:i:c:p:39-57
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