“U.S. worldwide taxation and domestic mergers and acquisitions” a discussion✰

Novia X. Chen and Terry Shevlin

Journal of Accounting and Economics, 2018, vol. 66, issue 2, 439-447

Abstract: Harris and O'Brien (2018) investigate whether U.S. tax policy distorts U.S. multinationals’ (MNCs) investment. They find that MNCs facing higher repatriation tax costs engage in fewer domestic acquisitions. The study re-examines the results in two prior studies that found no effect (Hanlon et al. 2015) and a positive effect (Martin et al. 2015) by introducing a new proxy for repatriation tax costs: A binary variable for whether the MNC uses the Double Irish structure. We critique the theory underlying the prediction as well as the proxy. We conclude that caution should be exercised in taking the results at face value.

Keywords: Repatriation tax costs; M&A; Domestic acquisitions (search for similar items in EconPapers)
JEL-codes: F23 G34 H21 M42 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:66:y:2018:i:2:p:439-447

DOI: 10.1016/j.jacceco.2018.08.013

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