U.S. worldwide taxation and domestic mergers and acquisitions
Jeremiah Harris () and
Journal of Accounting and Economics, 2018, vol. 66, issue 2, 419-438
This study shows that domestic mergers and acquisitions (M&A) were inhibited by the U.S.’s worldwide tax policy on foreign-earned income. Double Irish structures, a complex web of subsidiaries that reduce foreign tax rates and therefore increase potential repatriation tax rates, are associated with lower levels of domestic M&A by U.S. firms. These results do not reflect a continuation of prior trends or declines in worldwide acquisitiveness and are robust to several econometric approaches. We suggest that the Double Irish variable mitigates a confounding effect in an alternative tax variable that clouds inferences in tests of repatriation taxes and domestic M&A.
Keywords: Acquisitions; Repatriation; Taxes (search for similar items in EconPapers)
JEL-codes: F23 G34 G38 H21 H26 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:66:y:2018:i:2:p:419-438
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