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Internal capital market inefficiencies, shareholder payout, and abnormal leverage

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  • Beyer, Brooke
  • Downes, Jimmy
  • Rapley, Eric T.

Abstract

•We examine internal capital market inefficiencies and U.S. multinational firms' return of capital to shareholders.•The relation between cash and shareholder payouts differs between cash held domestically or by foreign subsidiaries.•The relation between foreign cash and total payout is negative for weak financial-health firms.•However, the relation between foreign cash and total payout is positive when access to external capital is less costly.•Firms with foreign cash and shareholder payouts have abnormal amounts of leverage.

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  • Beyer, Brooke & Downes, Jimmy & Rapley, Eric T., 2017. "Internal capital market inefficiencies, shareholder payout, and abnormal leverage," Journal of Corporate Finance, Elsevier, vol. 43(C), pages 39-57.
    • Handle: RePEc:eee:corfin:v:43:y:2017:i:c:p:39-57
    DOI: 10.1016/j.jcorpfin.2016.12.009
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    Cited by:

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    2. Tan, Wenhao & Li, Xiang & Zhao, Jianfeng & Cao, Lin & Wang, Haolun, 2023. "Internal capital markets and employee wage: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 88(C).
    3. Bradley S. Blaylock & Jimmy F. Downes & Mollie E. Mathis & Scott D. White, 2022. "Do bondholders incorporate expected repatriation taxes into their pricing of debt?," Review of Accounting Studies, Springer, vol. 27(4), pages 1457-1492, December.
    4. Tahir, Muhammad & Ibrahim, Haslindar & Zulkafli, Abdul Hadi & Mushtaq, Muhammad, 2020. "Corruption, national culture, law and dividend repatriation policy," Journal of Multinational Financial Management, Elsevier, vol. 57.
    5. Muhammad Tahir & Haslindar Ibrahim & Abdul Hadi Zulkafli & Muhammad Mushtaq, 2020. "Influence of Exchange Rate Fluctuations and Credit Supply on Dividend Repatriation Policy of U.S. Multinational Corporations," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 9(special i), pages 267-290.

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