(Un)intended consequences? The impact of the 2017 tax cuts and jobs act on shareholder wealth

Kalcheva, Ivalina; Plečnik, James M.; Tran, Hai; Turkiela, Jason

doi:10.1016/j.jbankfin.2020.105860

Cited by 30 publications

(20 citation statements)

References 66 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Recent studies note that firms with financial constraints or higher growth opportunities have not benefited as expected (e.g. Kalcheva et al, 2020). This paper analyzes the role of investor sentiment in asset prices particularly in closed-end funds performance.…”

Section: Introductionmentioning

confidence: 88%

Tax Reforms, Investor Sentiment and Closed-End Fund Performance

Kumar

2022

IJF

View full text Add to dashboard Cite

Purpose: Tax reforms have a significant impact on asset prices and shareholders’ wealth. The Tax Cuts and Jobs Act 2017 (TCJA) reduces the tax obligations for both households and businesses. This paper investigates the relationship between closed-end funds performance and investor sentiment induced by tax reforms. Methodology: Two proxies of investor sentiment are used to measure the impact on closed-end fund (CEF) performance. Results: The results reveal that overall, tax reforms have a positive effect on the closed-end fund valuations. Institutional investors’ sentiment takes a differential view from individual investors on CEF returns. Institutional investors’ sentiment does not show a relationship with fund returns. Medium size CEFs benefit more from tax reforms. Unique Contribution to Theory, Policy and Practice: Despite mixed signals, the results suggest that TCJA has influenced the investors’ sentiment resulting in excessive optimism.

show abstract

Section: Introductionmentioning

confidence: 88%

Tax Reforms, Investor Sentiment and Closed-End Fund Performance

Kumar

2022

IJF

View full text Add to dashboard Cite

show abstract

“…Contrastingly, studies that take corporate tax reforms as a natural experiment find the expected effect on firm market value. In this respect, several studies have, e.g., documented that US firms that were expected to benefit from the 2017 Tax Cuts and Jobs Act showed a positive stock market response around its enactment (see Diercks et al 2020;Kalcheva et al 2020;Wagner et al 2018).…”

Section: Related Literaturementioning

confidence: 99%

Losses Never Sleep - The Effect of Tax Loss Offset on Stock Market Returns during Economic Crises

2022

View full text Add to dashboard Cite

“…Due to the prior system of international taxation encouraging companies to accumulate, all the unrepatriated profits in the past are regarded as repatriated under the tax reform at a rate of 15.5% for liquid assets and 8% for illiquid assets, which was relatively low. [8] No matter the overseas profits are brought to the U.S. or not. What's more, the current global taxation system was transformed into a territorial taxation system.…”

Section: The Tax Systemand Reformmentioning

confidence: 99%

Analysis of Firms’ Share Repurchases ‘Causation: A Case Study of Starbucks

Chen¹,

Li²,

Tang³

2021

Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

View full text Add to dashboard Cite

This article explores the internal and external motivations of company's repurchase decision. In terms of methods, the author uses a combination of theory and empirical research methods and logically uses an analysis process from general rules to special cases to make the conclusions more accurate and have practical meaning. In the research process, the article firstly makes a theoretical analysis, summarizing and expanding various hypotheses about corporate share repurchase motives put forward by predecessors. In addition to analyzing the common signal transmission hypothesis, management incentive hypothesis, and other internal factors, the author also added external factors such as share liquidity and volatility, making the theoretical analysis more comprehensive and innovative. At the same time, to make the research more specific, this article selects Starbucks, a representative company, to analyze its repurchase behavior. In the case analysis, the article at first gives concrete indicators and indexes of each hypothesis based on theoretical research, transforming the qualitative analysis into quantitative research, making the research process clearer and more specific. The article selects Starbucks' financial data from 2009 to 2020 and obtains the corresponding indicator values through integration and calculation. Finally, to increase the conclusions' accuracy, the article selected several main factors through the previous analysis to conduct an empirical test and used Eviews software to perform regression analysis on time series data such as the number of share repurchases and company share prices. The regression results show that a company's number of shares repurchases is negatively correlated with the share price growth rate. The significance level is the highest, proving that the main motivation for corporate share repurchases is to increase the share price. Finally, this article summarizes Starbucks' share repurchase behavior based on relevant analysis results and non-financial information. It provides suggestions for other companies' share repurchase decisions, which have practical value.

show abstract

(Un)intended consequences? The impact of the 2017 tax cuts and jobs act on shareholder wealth

Cited by 30 publications

References 66 publications

Tax Reforms, Investor Sentiment and Closed-End Fund Performance

Tax Reforms, Investor Sentiment and Closed-End Fund Performance

Losses Never Sleep - The Effect of Tax Loss Offset on Stock Market Returns during Economic Crises

Analysis of Firms’ Share Repurchases ‘Causation: A Case Study of Starbucks

Contact Info

Product

Resources

About