Graduation Year
2016
Date of Submission
4-2016
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics-Accounting
Reader 1
Joshua Rosett
Terms of Use & License Information
Rights Information
© 2016 Juancho Gabriel Y. Sunga
Abstract
This paper utilizes a short-term event study to analyze the stock price reaction of domestic and foreign M&A target firms to the 2014, 2015, and 2016 Treasury regulatory announcements aimed at restricting corporate tax inversions. The results suggest that domestic M&A target firms experience insignificant abnormal returns as a result of the Treasury overlooking tax-favored acquisitions by foreign acquirers of domestic target firms with significant locked out earnings. Meanwhile, foreign M&A target firms experience insignificant abnormal returns associated with the ineffective 2014 and 2015 Treasury regulations and experience significant abnormal returns associated with the highly effective 2016 Treasury regulations. This paper contributes to the existing debate on corporate inversions by highlighting the common techniques used to escape the United States’ tax jurisdiction, as well as shedding light on a hidden inversion alternative that has been largely overlooked by the Treasury’s regulatory actions.
Recommended Citation
Sunga, Gabriel, "Corporate Tax Inversions: An Event Study on the Impact of Treasury Regulations on Domestic and Foreign M&A Target Firms" (2016). CMC Senior Theses. 1346.
https://scholarship.claremont.edu/cmc_theses/1346
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
