We study the economic consequences of anti-loss trafficking rules, which disallow the use of loss carry-forwards as tax shield after a substantial ownership change. Using staggered changes to these rules, we find that limiting the transfer of tax losses reduces the number of M&As with...

Following a merger or acquisition, a target firm's effective tax rate decreases on average by 3 percentage points. This decline is as high as 8 percentage points when the acquiring firm is tax aggressive. Further, target firm profitability decreases, particularly in the case of targets having a...

The paper deals with cross-border mergers that may be performed either out of or into the Czech Republic and focuses on the accounting and tax aspects of these transactions. Attention was also paid to the most important legal requirements imposed on merger projects and the net assets valuations....

We test whether geographical location, audit quality and equity offering play a role in the earnings quality of Reverse Merger (RM) firms. We provide evidence that, contrary to the popular focus by the business press, earnings management happens in both U.S. and international RM companies. We...

Analysis of the causes of failure has often been shallow. This paper proposes an explanation as to why some mergers fail to achieve, based on the comparison between merging firms' specifics. We argue that cancellation may stem from dividend policy dissimilarity between the acquirer and the...

Various studies have analyzed the main determinants of payment method in M&As since the 1980s. We examine how relative the existing dividend policy of the acquirer affects the choice of the payment method. Based on the contingent-pricing effect of stock offer, we hypothesize that the likelihood...

This paper studies whether debt renegotiation mitigates debt overhang and improves investment efficiency. Using mergers between lenders participated in the same syndicated loans as natural experiments that exogenously reduce the number of lenders and thus make renegotiation easier, I find that...

This paper studies how the conflict of interest between shareholders and creditors affects corporate payout policy. Using mergers between lenders and equity holders of the same firm as shocks to the shareholder-creditor conflict, I show that firms pay out less when there is less conflict between...

Regulators and economists are often concerned with mergers and acquisitions (M&A) because of their potential to reduce competition by decreasing the number of suppliers and consolidating market share. However, Stigler (1955) points out that in certain situations, mergers may increase competition...

Repatriation taxes reduce the competitiveness of multinational firms from tax credit countries when bidding for targets in low tax countries. This comparative disadvantage with respect to bidders from exemption countries violates ownership neutrality, which results in production inefficiencies...