Quotation Leibrecht, Markus, Bellak, Christian, Wild, Michael. 2009. Does lowering dividend tax rates increase dividends repatriated? Evidence of intra-firm dividend repatriation policies by German Multinational Enterprises. Deutsche Bundesbank Diskussionspapier, Nr. 19/2009, Reihe 1.


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Abstract

This paper analyzes the impact dividend taxes exert on the dividends repatriated from foreign affiliates to their German parent company. Based on an augmented Lintner model of firms' dividend payout decisions, the paper focusses on cross-border intra-firm dividend payments of wholly-owned foreign affiliates in the manufacturing sector to their parent companies in Germany. Firm-level data from the Microdatabase Direct Investment (MiDi) of the Deutsche Bundesbank is used. Results firstly signal the validity of the original Lintner model for cross-border intra-firm dividend payments of German affiliates abroad, although the target payout ratio and the degree of dividend smoothing are relatively low once time-invariant unobserved heterogeneity is controlled for. Secondly, results from an augmented Lintner model imply that increases in dividend taxes indeed have a statistically significant negative impact on the expected value of dividends repatriated: A one percentage point increase in the dividend tax rate would decrease dividends repatriated by about 3.5 percent.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Does lowering dividend tax rates increase dividends repatriated? Evidence of intra-firm dividend repatriation policies by German Multinational Enterprises
Title of whole publication Deutsche Bundesbank Diskussionspapier, Nr. 19/2009, Reihe 1
Year 2009

Associations

Projects
F 2012 - Causes and Consequences of FDI in Central and East European Countries and the Implications for Tax Coordination in the Enlarged Europe
People
Leibrecht, Markus (Former researcher)
Bellak, Christian (Details)
Wild, Michael (Former researcher)
Organization
Institute for Public Sector Economics IN (Details)
Research Institute for International Taxation FI (Details)
Institute for Economic Policy and Industrial Economics IN (Details)
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