Does Lowering Dividend Tax Rates Increase Dividends Repatriated? Evidence of Intrafirm Cross-Border Dividend Repatriation Policies by German Multinational Enterprises

Bibliographic Data

ID24035614
AuthorsChristian Bellak (0000-0002-7174-554X, Vienna University of Economics and Business), Markus Leibrecht (0000-0001-5499-4280, Vienna University of Economics and Business)
Year2010
Volume66
Issue4
Pages350-383
Publication date2010-01-01
Open AccessNo
TypeARTICLE
VenueFinanzArchiv (JOURNAL)
Journal identifiersISSN: 0015-2218 • E-ISSN: 1614-0974
PublisherMohr Siebeck (PUBLISHER)
DOI10.1628/001522110x540847
OpenAlexW3123305861
LanguageEN
Citations received2
References cited4

This paper explores the effect dividend taxes exert on dividends repatriated from foreign affiliates to their German parent companies. The empirical analysis based on firm-level data from the Microdatabase Direct Investment provided by the Deutsche Bundesbank first signals the validity of the original Lintner model for cross-border intrafirm dividend payments of German affiliates abroad. Second, results imply that high dividend taxes indeed have a statistically significant negative effect on dividends repatriated. Our calculations suggest that a one-percentage-point decrease in the dividend tax rate would increase dividends repatriated by about 3.75%. Evaluated at the mean of positive dividend payments, a semielasticity of -1.71 is derived.

Business · Dividend · Dividend policy · Economics · German · Monetary economics · Multinational corporation · Political science · Repatriation · Corporate Finance and Governance · Corporate Taxation and Avoidance · Economic Policies and Impacts · Finance

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