[Translate to English:] D3
Read out

Publication by Harald Amberger and David Samuel


Amberger, Harald, Markle, Kevin, Samuel, David. Repatriation Taxes, Internal Agency Conflicts, and Subsidiary-level Investment Efficiency. The Accounting Review: forthcoming.

Using a global sample of multinational corporations (MNCs) and their foreign subsidiaries, the authors find that repatriation taxes impair subsidiary-level investment efficiency. This effect is concentrated in subsidiaries with high information asymmetry and in subsidiaries that are weakly monitored, consistent with internal agency conflicts between the central management of the MNC and the manager of the foreign subsidiary being the driver. Quasi-natural experiments in the UK and Japan establish a causal relationship for our findings and suggest that a repeal of repatriation taxes increases subsidiary-level investment efficiency while reducing the level of investment. The paper provides timely empirical evidence to inform expectations for the effects of a recent change to the U.S. international tax law that eliminated repatriation taxes from most of the future foreign earnings of U.S. MNCs.

Further information: https://doi.org/10.2308/TAR-2019-0259