Firm-Specific Currency Exposure, Repatriation, and the Market Value of Repatriation Taxes

IF 1.3 Q3 BUSINESS, FINANCE
Jimmy F. Downes, Mollie E. Mathis, L. Kutcher
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引用次数: 0

Abstract

As the U.S. dollar (USD) strengthens relative to foreign currencies, the USD value of foreign subsidiary-to-parent dividends decreases, and the foreign tax credit remains anchored at a blended rate. During periods of USD strength, this asymmetry lowers the effective tax cost of repatriation at the cost of a lower after-tax dividend to the U.S. parent. This paper develops a firm-specific measure of currency exposure and provides evidence that repatriation likelihood increases during periods of firm-specific USD strength. We show that investors place a premium on repatriation costs when the USD strengthens against a firm-specific basket of currencies for repatriating firms. This premium implies that investors value the benefit of a lower effective tax cost of repatriation more than the potential cost of a lower after-tax dividend available to the U.S. parent. These results appear concentrated in firms with high levels of foreign cash and firms susceptible to earnings fixation.
企业特定货币风险、汇回和汇回税的市场价值
随着美元相对于外币走强,外国子公司对母公司股息的美元价值下降,外国税收抵免仍以混合汇率固定。在美元走强期间,这种不对称性降低了遣返的有效税收成本,代价是美国母公司的税后股息较低。本文提出了一种特定于企业的货币敞口衡量标准,并提供了证据表明,在特定于企业美元走强期间,遣返可能性增加。我们表明,当美元对遣返公司的一篮子特定货币走强时,投资者会对遣返成本进行溢价。这一溢价意味着,投资者更看重遣返的有效税收成本较低的好处,而不是美国母公司可获得的税后股息较低的潜在成本。这些结果似乎集中在外国现金水平高的公司和容易固定收益的公司。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
3.20
自引率
12.50%
发文量
14
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