Does Acquistion by Non-U.S. Shareholders Cause U.S. Firms to Pay Less Tax?

University of North Carolina Chapel Hill Working Paper

22 Pages Posted: 30 Aug 2003

See all articles by Jennifer Blouin

Jennifer Blouin

University of Pennsylvania - Accounting Department

Julie Collins

University of North Carolina at Chapel Hill

Douglas A. Shackelford

University of North Carolina Kenan-Flagler Business School; National Bureau of Economic Research (NBER)

Date Written: June 2003

Abstract

The U.S. corporate tax revenue implications for foreign-domiciled firms acquiring U.S. companies is an important and longstanding tax policy issue. This study attempts to provide some empirical underpinning for this controversial debate. We compare actual corporate taxable income before and after their 1996 acquisitions for 31 matched pairs, half acquired by foreign-controlled companies and half acquired by American-controlled firms. Contrary to claims that foreign-controlled firms pay less tax, we find no evidence that taxable income declines more after a non-U.S. shareholder acquires a U.S.-domiciled firm than after a U.S. shareholder acquires a U.S.-domiciled firm.

JEL Classification: K34, H26, H25

Suggested Citation

Blouin, Jennifer and Collins, Julie H. and Shackelford, Douglas A., Does Acquistion by Non-U.S. Shareholders Cause U.S. Firms to Pay Less Tax? (June 2003). University of North Carolina Chapel Hill Working Paper, Available at SSRN: https://ssrn.com/abstract=430340 or http://dx.doi.org/10.2139/ssrn.430340

Jennifer Blouin

University of Pennsylvania - Accounting Department ( email )

1315 SHDH
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215-898-1266 (Phone)

Julie H. Collins

University of North Carolina at Chapel Hill ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Douglas A. Shackelford (Contact Author)

University of North Carolina Kenan-Flagler Business School ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States
919-962-3197 (Phone)
919-962-4727 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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