Taxes, corporate takeovers, and step transactions

Onji, Kazuki; Gordon, Roger H.

Taxes, corporate takeovers, and step transactions

Onji, Kazuki; Gordon, Roger H.

Discussion Papers In Economics And Business, 2021, 21-16, 1-25

Number of Access:339（2025-09-04 08:31 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/85171

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Title	Taxes, corporate takeovers, and step transactions
Creator	NRID 1000080709858 1000080709858 ORCID 0000-0002-0717-2951 0000-0002-0717-2951 researchmap permalink onjikazuki onjikazuki Scopus Author ID 24335610700 24335610700 CreatorName Onji, Kazuki
Creator	CreatorName Gordon, Roger H.
Subject	Tax Avoidance
	M&A
	Corporate Restructuring
Abstract	Taxes affect the size of a corporate takeover market in theory; the extant empirical studies from the US data offer limited such evidence. We consider Japan after 2001, which offers an alternative setting in which a tax system implicitly subsidizes mergers that follow a particular sequence of steps (“step transactions”). We construct a novel dataset on step transactions from a list of takeover deals from 1996 through 2013 and examine their utilization rates before and after Japan’s tax reform of 2001. We find a statistically and economically significant discontinuity across the two regimes. We also examine tax payments using a panel dataset of firms from 1997 through 2013 and find a strong association between unexplained falls in tax payments and step transactions. The Japanese tax system provided subsidies to marginal as well as infra-marginal mergers among domestic corporations: we estimate tax expenditure to be ¥172.3 billion.
Publisher	Graduate School of Economics, Osaka University
Source Title	Discussion Papers In Economics And Business
Volume (Issue)	21-16
Page	1-25
Date of Issued	2021-11
Language	English
Handle URL	https://hdl.handle.net/11094/85171
NCID	AA1160366X
Relation.references	URI http://www2.econ.osaka-u.ac.jp/econ_society/dp/2116.pdf
Access Rights	metadata only access
Category	ディスカッション／ワーキング・ペーパー DP/WP
Category	Discussion Papers In Economics And Business

Resource Type	technical report
Local Type	DP/WP
DCMI Type	Text
DCTERMS.bibliographicCitation	Discussion Papers In Economics And Business. 2021, 21-16, p. 1-25
DC.title	Taxes, corporate takeovers, and step transactions
DC.creator	Onji, Kazuki
DC.creator	Gordon, Roger H.
DC.publisher	Graduate School of Economics, Osaka University
DC.language' scheme='DCTERMS.RFC1766	English
DC.type' scheme='DCTERMS.DCMIType	Text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2021-11
DC.relation' scheme='DCTERMS.URI	http://www2.econ.osaka-u.ac.jp/econ_society/dp/2116.pdf
DC.subject	Tax Avoidance
	M&A
	Corporate Restructuring
DCTERMS.abstract	Taxes affect the size of a corporate takeover market in theory; the extant empirical studies from the US data offer limited such evidence. We consider Japan after 2001, which offers an alternative setting in which a tax system implicitly subsidizes mergers that follow a particular sequence of steps (“step transactions”). We construct a novel dataset on step transactions from a list of takeover deals from 1996 through 2013 and examine their utilization rates before and after Japan’s tax reform of 2001. We find a statistically and economically significant discontinuity across the two regimes. We also examine tax payments using a panel dataset of firms from 1997 through 2013 and find a strong association between unexplained falls in tax payments and step transactions. The Japanese tax system provided subsidies to marginal as well as infra-marginal mergers among domestic corporations: we estimate tax expenditure to be ¥172.3 billion.
DC.format	85171
citation_title	Taxes, corporate takeovers, and step transactions
citation_author	Onji, Kazuki
citation_author	Gordon, Roger H.
citation_publisher	Graduate School of Economics, Osaka University
citation_language	English
citation_date	2021-11
citation_journal_title	Discussion Papers In Economics And Business
citation_volume	21-16
citation_firstpage	1
citation_lastpage	25
citation_public_url	https://hdl.handle.net/11094/85171
citation_abstract_html_url	http://www2.econ.osaka-u.ac.jp/econ_society/dp/2116.pdf

Taxes, corporate takeovers, and step transactions

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