US multinationals and cash holdings

作者：Gu, Tiantian^*

来源：Journal of Financial Economics, 2017, 125(2): 344-368.

DOI：10.1016/j.jfineco.2017.05.007

• Cash holdings
• Multinationals
• Intangibles
• Structural estimation

U.S. multinational firms hold significantly more cash than domestic firms. I study this cash differential using a dynamic model featuring corporate physical and intangible investment, cross-border decisions, and financial policies. I find that the cash differential diminishes by 42% if repatriation costs are set to zero. Hence, costly repatriation induces cash accumulation offshore. Further, firms that invest overseas have different ex ante cash policies from firms that do not. I examine this self-selection effect by elimiriating heterogeneous intangibility across multinational and domestic firms, which reduces the cash differential by 28%. 1 also examine the likelihood of corporate inversion under federal regulations. The estimated annual tax loss to the U.S. Treasury from inversions is reduced from $2.2 billion to $1.3 billion if the requirements for foreign ownership are tightened from 20% to 50%.

• 出版日期2017-8
• 单位东北大学