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Investment and Capital Constraints: Repatriations Under the American Jobs Creation Act / Michael Faulkender, Mitchell Petersen.
- Format:
- Book
- Author/Creator:
- Faulkender, Michael.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w15248.
- NBER working paper series no. w15248
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Investment and Capital Constraints
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2009.
- Summary:
- The American Jobs Creation Act (AJCA) significantly lowered US firms' tax cost when accessing their unrepatriated foreign earnings. Using this temporary shock to the cost of internal financing, we examine the role of capital constraints in firms' investment decisions. Controlling for the capacity to repatriate foreign earnings under the AJCA, we find that a majority of the funds repatriated by capital constrained firms were allocated to approved domestic investment. While unconstrained firms account for a majority of repatriated funds, no increase in investment resulted. Contrary to other examinations of the AJCA, we find little change in leverage and equity payouts.
- Notes:
- Print version record
- August 2009.
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