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The effect of repatriation tax costs on U.S. multinational investment
Hanlon, Michelle; Lester, Rebecca; Verdi, Rodrigo - In: Journal of Financial Economics 116 (2015) 1, pp. 179-196
This paper investigates whether the U.S. repatriation tax for U.S. multinational corporations affects foreign … investment. Our results show that the locked-out cash due to repatriation tax costs is associated with a higher likelihood of … foreign (but not domestic) acquisitions. We also find a negative association between tax-induced foreign cash holdings and the …
Persistent link: https://www.econbiz.de/10011263120
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Political geography and stock returns: The value and risk implications of proximity to political power
Kim, Chansog; Pantzalis, Christos; Chul Park, Jung - In: Journal of Financial Economics 106 (2012) 1, pp. 196-228
We show that political geography has a pervasive effect on the cross-section of stock returns. We collect election results over a 40-year period and use a political alignment index (PAI) of each state's leading politicians with the ruling (presidential) party to proxy for local firms’...
Persistent link: https://www.econbiz.de/10010593839
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The role of stock ownership by US members of Congress on the market for political favors
Tahoun, Ahmed - In: Journal of Financial Economics 111 (2014) 1, pp. 86-110
I examine whether stock ownership by politicians helps to enforce noncontractible quid pro quo relations with firms. The ownership by US Congress members in firms contributing to their election campaigns is higher than in noncontributors. This bias toward contributors depends on the financial...
Persistent link: https://www.econbiz.de/10010718737
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The evolution of capital structure and operating performance after leveraged buyouts: Evidence from U.S. corporate tax returns
Cohn, Jonathan B.; Mills, Lillian F.; Towery, Erin M. - In: Journal of Financial Economics 111 (2014) 2, pp. 469-494
This study uses corporate tax return data to examine the evolution of firms' financial structure and performance after …
Persistent link: https://www.econbiz.de/10010737669
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Exploring the role Delaware plays as a domestic tax haven
Dyreng, Scott D.; Lindsey, Bradley P.; Thornock, Jacob R. - In: Journal of Financial Economics 108 (2013) 3, pp. 751-772
We examine whether Delaware is a domestic tax haven. We find that taxes play an economically important role in … determining whether U.S. firms locate subsidiaries in Delaware and that a Delaware-based state tax avoidance strategy lowers state … effective tax rates by between 0.7 and 1.1 percentage points, on average. The tax savings represent a 15–24% decrease in the …
Persistent link: https://www.econbiz.de/10010665559
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Labor unions and tax aggressiveness
Chyz, James A.; Leung, Ching; Siu, Winnie; Zhen Li, Oliver - In: Journal of Financial Economics 108 (2013) 3, pp. 675-698
We examine the impact of unionization on firms' tax aggressiveness. We find a negative association between firms' tax … aggressiveness and union power and a decrease in tax aggressiveness after labor union election wins. This relation is consistent with … labor unions influencing managers' in one, or both, of two ways: (1) constraining managers' ability to invest in tax …
Persistent link: https://www.econbiz.de/10010665565
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Payout taxes and the allocation of investment
Becker, Bo; Jacob, Marcus; Jacob, Martin - In: Journal of Financial Economics 107 (2013) 1, pp. 1-24
When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes will favor investment by firms who can...
Persistent link: https://www.econbiz.de/10011039284
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Uncertainty, market structure, and liquidity
Chung, Kee H.; Chuwonganant, Chairat - In: Journal of Financial Economics 113 (2014) 3, pp. 476-499
In this study we show that market uncertainty [measured by the Chicago Board Options Exchange Market Volatility Index (VIX)] exerts a large market-wide impact on liquidity, which gives rise to co-movements in individual asset liquidity. The effect of VIX on stock liquidity is greater than the...
Persistent link: https://www.econbiz.de/10010906187
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Political capital and moral hazard
Kostovetsky, Leonard - In: Journal of Financial Economics 116 (2015) 1, pp. 144-159
This paper examines how political connections affect risk exposure of financial institutions. Using a geography-based measure, I find that politically connected firms have higher leverage and their stocks have higher volatility and beta. Furthermore, prior to the 2008 financial crisis,...
Persistent link: https://www.econbiz.de/10011263121
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Commonality in news around the world
Dang, Tung Lam; Moshirian, Fariborz; Zhang, Bohui - In: Journal of Financial Economics 116 (2015) 1, pp. 82-110
Motivated by the pioneering study of Morck, Yeung, and Yu (2000), this paper investigates whether and how news commonality varies according to a country׳s institutional environments. Using a unique global news data set across 41 countries for the 2000–2009 period, we document three notable...
Persistent link: https://www.econbiz.de/10011263129