International taxation and M&A prices


Hagen, Dominik von ; Pönnighaus, Fabian Nicolas


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URL: https://ub-madoc.bib.uni-mannheim.de/43599
URN: urn:nbn:de:bsz:180-madoc-435993
Document Type: Working paper
Year of publication: 2017
The title of a journal, publication series: ZEW Discussion Papers
Volume: 17-040
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > Zentrum für Europ. Wirtschaftsforschung (ZEW)
Business School > ABWL u. Betriebswirtschaftliche Steuerlehre II (Spengel)
MADOC publication series: Veröffentlichungen des ZEW (Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: F23 , G34 , H25 , H26 , H32 , H73,
Keywords (English): International taxation , repatriation taxes , capital gains taxes , lock-in effect , multinational entities , cross-border M&As
Abstract: We show that corporate taxation systems regarding foreign dividends and capital gains across 49 countries differ in many aspects, contradicting the requirements for capital ownership neutrality and indicating that ownership patterns are distorted. Consequently, a national tax policy maker may ask which taxation system improves the position of its multinational entreprises in bidding for foreign targets. To address this question, we develop a theoretical model on the impact of foreign dividends and capital gains taxation on cross-border M&A prices from the acquirer’s perspective and theoretically compare different taxation systems. In a next step, we empirically validate our model in a regression analysis on a large cross-border M&A data set. Based on this analysis, we find that foreign dividends taxation rather than capital gains taxation impacts M&A prices. Finally, we provide tax policy suggestions.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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