Do foreign firms cater to American investors’ dividend desires?

Tat-kei Lai, Travis Ng and Kwok Ping Tsang

Journal of International Money and Finance, 2025, vol. 158, issue C

Abstract: Will foreign firms alter their dividend policies to cater to minority American investors’ tax preferences? Conceptually, in the context of foreign controlling shareholders making the tunneling-and-dividend decisions, foreign firms will not do so unless they value a broad American shareholder base. During a U.S. tax cut that increases American investors’ dividend desires only from qualified foreign corporations (QFCs), the dividend policies of those QFCs domiciled in low withholding tax jurisdictions exhibit a significantly stronger catering pattern than others. The conceptual framework and the empirical results jointly suggest that some foreign firms see the value of a broad American shareholder base.

Keywords: Theory of the firm; Foreign ownership; Controlling shareholder; Corporate governance; Tax policies (search for similar items in EconPapers)
JEL-codes: F21 G11 H25 L22 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S026156062500141X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:158:y:2025:i:c:s026156062500141x

DOI: 10.1016/j.jimonfin.2025.103406

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().