Does Dividend Tax Impede Competition for Corporate Charters?

Tat-kei Lai, Travis Ng

Publikation: KonferencebidragPaperForskningpeer review

Abstrakt

High dividend income tax in the U.S. can impede state competition in the market for corporate charters. We offer a model to formalize the mechanism through which dividend tax lowers the incentives for a state legislator to refrain from enacting takeover regulations. We test a key driver within the model, that dividend tax exacerbates agency conflicts between management and shareholders, making takeover regulations less consequential to the corporations that have their shareholders subject to the tax. The implication, that under a dividend tax cut, firms governed by fewer anti-takeover provisions would react more by increasing dividends and reducing overall investment, is borne out in the data.
OriginalsprogEngelsk
Publikationsdato2014
Antal sider42
StatusUdgivet - 2014
BegivenhedThe 41st Annual European Association for Research in Industrial Economics Conference. EARIE 2014 - Milan, Italien
Varighed: 29 aug. 201431 aug. 2014
Konferencens nummer: 41
http://www.earie2014.org/

Konference

KonferenceThe 41st Annual European Association for Research in Industrial Economics Conference. EARIE 2014
Nummer41
LandItalien
ByMilan
Periode29/08/201431/08/2014
Internetadresse

Emneord

  • Takeover regulations
  • Corporate law
  • Tax law
  • Corporate governance
  • Agency costs
  • Dividend taxation
  • Dividend payment
  • Investment

Citationsformater

Lai, T., & Ng, T. (2014). Does Dividend Tax Impede Competition for Corporate Charters?. Afhandling præsenteret på The 41st Annual European Association for Research in Industrial Economics Conference. EARIE 2014, Milan, Italien.