Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Joshua Rosett

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2016 Juancho Gabriel Y. Sunga


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.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.