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An Event Study Analysis of Tax Inversion Announcements

  • This paper examines the short-term effects of tax inversion announcements on inverting firms´ share prices, and thereby analyses the value creation of inversion activities. For the analysis, the paper looks at a sample of 41 inverted U.S. firms during the time period of 1994 to 2015. To quantify the stock returns related to inversion announcements, event study method has been implemented. Using the parametric t-test, the paper finds evidence indicating that the announcements of tax inversions have a significant negative impact on firm value with -4.8%. 16 out of 41 investigated firms show value changing effects associated with inversions. The highest impact on stock prices are captured directly on the announcement day. Furthermore, the performance of pharmaceutical and Irish incorporated deals indicate positive market reactions with 7.30% and 5.9% respectively.

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Metadaten
Author:Shalini Rajapakse
URN:urn:nbn:de:kobv:b721-opus4-13579
Referee:Avo Schönbohm
Advisor:Wojciech Stiller
Document Type:Bachelor Thesis
Language:English
Date of first Publication:2019/01/04
Publishing Institution:Hochschulbibliothek HWR Berlin
Granting Institution:Hochschule für Wirtschaft und Recht Berlin
Date of final exam:2016/11/11
Release Date:2019/01/04
Tag:Aggressive tax planning; M&As; event study methodology; tax inversions
Page Number:68
Institutes:FB I - Wirtschaftswissenschaften / International Business Management (IBMAN) B.A.
Licence (German):License LogoUrheberrechtsschutz