Watch what i do, not what I say
Subtitle: the unintended consequences of the homeland investment act
By: Dhammika Dharmapala, C. Fritz Foley, Kristin J. Forbes.
Contributors: Foley, C. Fritz.; Forbes, Kristin; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 15023; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15023.
Publisher: National Bureau of Economic Research
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper analyzes the impact on firm behavior of the Homeland Investment Act of 2004, which provided a one-time tax holiday for the repatriation of foreign earnings by U.S.  multinationals.  The analysis controls for endogeneity and omitted variable bias by using instruments that identify the firms likely to receive the largest tax benefits from the holiday.  Repatriations did not lead to an increase in domestic investment, employment or R&D -- even for the firms that lobbied for the tax holiday stating these intentions and for firms that appeared to be financially constrained.  Instead, a $1 increase in repatriations was associated with an increase of almost $1 in payouts to shareholders.  These results suggest that the domestic operations of U.S.  multinationals were not financially constrained and that these firms were reasonably well-governed.  The results have important implications for understanding the impact of U.S.  corporate tax policy on multinational firms"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/11/2009.

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