Dividends and Profits: Some Unsubtle Foreign Influences
AbstractAmerican corporations earn a significant share of their profits from foreign sources, out of which they appear to pay dividends at rates that are three times higher than their payout rates from domestic profits. Why firms do so is unclear, although this behavior is consistent with the use of dividends to signal profitability. This payout behavior implies that a significant part of the U.S. tax revenue generated by the foreign profits of U.S. corporations arises through the taxation of dividends received by individuals and that the cost of capital may be higher for foreign than for domestic operations. Copyright 1996 by American Finance Association.
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Bibliographic InfoArticle provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 51 (1996)
Issue (Month): 2 (June)
Other versions of this item:
- Hines Jr., J.R., 1991. "Dividends And Profits: Some Unsubtle Foreign Influences," Papers 77, Princeton, Woodrow Wilson School - John M. Olin Program.
- James R. Hines Jr., 1996. "Dividends and Profits: Some Unsubtle Foreign Influences," NBER Working Papers 3730, National Bureau of Economic Research, Inc.
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
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