Real Effects of International Tax Planning: Evidence from Domestic Acquisitions

We examine whether and how the tax haven subsidiary profiles of U.S. acquirers and targets affect M&A pairing. Using disclosed material subsidiary data, we develop two measures of tax haven subsidiary relatedness between the acquirer and its target. Examining the associations of these measures w...

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Main Authors: CHOW, Travis, KLASSEN, Kenneth
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Language:English
Published: Institutional Knowledge at Singapore Management University 2014
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Online Access:https://ink.library.smu.edu.sg/soa_research/1440
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spelling sg-smu-ink.soa_research-24392018-07-13T06:44:36Z Real Effects of International Tax Planning: Evidence from Domestic Acquisitions CHOW, Travis KLASSEN, Kenneth We examine whether and how the tax haven subsidiary profiles of U.S. acquirers and targets affect M&A pairing. Using disclosed material subsidiary data, we develop two measures of tax haven subsidiary relatedness between the acquirer and its target. Examining the associations of these measures with the probability of merger pair formation, the results suggest that acquirers are more likely to select targets whose subsidiaries are located in tax havens similar to their own, consistent with economies of scale in tax planning. This relation suggests that firms’ past tax planning decisions have significant effects on their future real corporate decisions. 2014-12-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1440 http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Tax Planning Tax Havens Mergers and Acquisitions Accounting Taxation
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Tax Planning
Tax Havens
Mergers and Acquisitions
Accounting
Taxation
spellingShingle Tax Planning
Tax Havens
Mergers and Acquisitions
Accounting
Taxation
CHOW, Travis
KLASSEN, Kenneth
Real Effects of International Tax Planning: Evidence from Domestic Acquisitions
description We examine whether and how the tax haven subsidiary profiles of U.S. acquirers and targets affect M&A pairing. Using disclosed material subsidiary data, we develop two measures of tax haven subsidiary relatedness between the acquirer and its target. Examining the associations of these measures with the probability of merger pair formation, the results suggest that acquirers are more likely to select targets whose subsidiaries are located in tax havens similar to their own, consistent with economies of scale in tax planning. This relation suggests that firms’ past tax planning decisions have significant effects on their future real corporate decisions.
format text
author CHOW, Travis
KLASSEN, Kenneth
author_facet CHOW, Travis
KLASSEN, Kenneth
author_sort CHOW, Travis
title Real Effects of International Tax Planning: Evidence from Domestic Acquisitions
title_short Real Effects of International Tax Planning: Evidence from Domestic Acquisitions
title_full Real Effects of International Tax Planning: Evidence from Domestic Acquisitions
title_fullStr Real Effects of International Tax Planning: Evidence from Domestic Acquisitions
title_full_unstemmed Real Effects of International Tax Planning: Evidence from Domestic Acquisitions
title_sort real effects of international tax planning: evidence from domestic acquisitions
publisher Institutional Knowledge at Singapore Management University
publishDate 2014
url https://ink.library.smu.edu.sg/soa_research/1440
_version_ 1770572442348027904