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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.

Suggested Citation

  • 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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    2. 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.
    3. Devos, Erik & Li, He, 2021. "Vertical integration to mitigate internal capital market inefficiencies," Journal of Corporate Finance, Elsevier, vol. 69(C).
    4. Eulaiwi, Baban & Alghamdi, Fatmah Saeed & Al-Hadi, Ahmed & Duong, Lien & Taylor, Grantley, 2024. "U.S. multinational corporations' income shifting incentives and share repurchases: Evidence across differential taxation systems," Global Finance Journal, Elsevier, vol. 60(C).
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    6. 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.

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