Alessandro Chiari, Charles University

Paper: “Does the presence of tax haven subsidiaries affect the usage of share buybacks schemes? The case of U.S. multinational companies”

Abstract: This study examines whether the use of tax haven subsidiaries by U.S. multinational corporations (MNCs) is associated with more intense usage of share buybacks. We find that MNCs’ more intensive tax haven subsidiary use is positively associated with a higher buyback ratio. In cross-sectional analyses, we identify channels through which the positive association between tax haven intensity and share buybacks is more pronounced. We also test the share buyback execution of U.S. MNCs affected by recent legislation promulgated in the U.S. (2017 corporate tax cut, 2017 repatriation tax, 2022 buyback excise). Our findings reveal a higher sensibility to these legislations by MNCs with more presence in tax havens. Overall, this study adds to an emerging body of literature on corporate taxation and tax havens.