Does Lowering Dividend Tax Rates Increase Dividends Repatriated? Evidence of Intrafirm Cross-Border Dividend Repatriation Policies by German Multinational EnterprisesBellak, C. and Leibrecht, M. (2010) Does Lowering Dividend Tax Rates Increase Dividends Repatriated? Evidence of Intrafirm Cross-Border Dividend Repatriation Policies by German Multinational Enterprises. FinanzArchiv: Public Finance Analysis, 66 (4). pp. 350-383. ISSN 0015-2218 Full text not archived in this repository. It is advisable to refer to the publisher's version if you intend to cite from this work. See Guidance on citing. To link to this item DOI: 10.1628/001522110X540847 Abstract/SummaryThis paper explores the effect dividend taxes exert on dividends repatriated from foreign affiliates to their German parent companies. The empirical analysis based on firm-level data from the Microdatabase Direct Investment provided by the Deutsche Bundesbank first signals the validity of the original Lintner model for cross-border intrafirm dividend payments of German affiliates abroad. Second, results imply that high dividend taxes indeed have a statistically significant negative effect on dividends repatriated. Our calculations suggest that a one-percentage-point decrease in the dividend tax rate would increase dividends repatriated by about 3.75%. Evaluated at the mean of positive dividend payments, a semielasticity of -1.71 is derived.
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