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Takeovers and taxes: Estimates from a two-sided matching model

Author

Listed:
  • Kazuki Onji

    (The University of Osaka)

  • Roger H. Gordon

    (University of California, San Diego)

  • Tue Gørgens

    (Australian National University)

Abstract

In assessing the influence of taxes on corporate takeovers, sorting among firms poses complications. We employ a recently developed matching model that explicitly accounts for sorting behaviors, applying it for the first time to analyze tax implications in corporate takeover markets. Examining Japanese M&A transactions (1999–2018) between publiclytraded corporations, our estimates reveal heterogeneous effects, where the role of acquirer information and control perceptibly moderates the value of loss carryforwards across different transaction types. However, the estimated value generated from loss carryforwards is modest, indicating the stringency of Japan’s anti-avoidance rules.

Suggested Citation

  • Kazuki Onji & Roger H. Gordon & Tue Gørgens, 2025. "Takeovers and taxes: Estimates from a two-sided matching model," Discussion Papers in Economics and Business 25-10, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:2510
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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