This paper conducts a study on the short and long-term equity performance of companies that have underwent corporate inversion since Section 7874, which considerably redefined the mechanisms of inversion. Prior studies have concluded only mixed market reaction to the announcement of inversion, on average, despite evidence that these transactions result in long- term effective tax rate reductions. Because equity prices should immediately correct for any changes in long-term expectations, one would expect the market to react positively to the announcements. Meanwhile, a concurrent study by Elizabeth Chorvat has identified that pre- 2004 inversions have created statistically and economically significant long-term outperformance. Many of the cost associated with inversion, especially post-2004 inversion, are difficult to accurately define. The continued prevalence of inversion, coupled with the enigmatic nature of inversions costs, suggests more recent inversions may also be mispriced. Utilizing a Fama and French 5 Factor Model, this study identifies -4.47% of average long-term annualized abnormal returns for companies that have underwent inversion since 2004. Coupled with both the positive market reaction to post-2004 inversion announcements and Chorvats findings, this suggests that the market may initially underestimate the costs of inversion associated with Section 7874 at the time of announcement.

This paper investigates the short-term and long-term stock performance of firms that undergo corporate inversions. The results show that the market response to the initial inversion announcement differs based on the type of inversion. Merger & Acquisition (M&A) and restructuring inversions are perceived positively by the market, but naked inversions do not generate a price response. Furthermore, acquirers in inversion-related M&A transactions generate a price premium that is in excess of what is typically generated by acquirers in non-inversion M&A. In the long-run, firms that invert through naked and M&A inversions do not generate significant excess returns above the S&P 500. In contrast, restructured inverted firms generate significant excess returns of 214.53%. Collectively, however, the results suggest that corporate inversion alone is not an indicator of future stock returns.

This new edition of Thomas Clarke’s popular International Corporate Governance offers a comprehensive guide to understanding corporate governance as a discipline, while incorporating new case studies and material that takes account of the implications of the global financial crisis and the continuing sustainability crisis.

This up-to-date, research-oriented textbook focuses on the relationship between compensation systems and firm overall performance. In contrast to more traditional compensation texts, it provides a strategic perspective to compensation administration rather than a functional viewpoint. The text emphasizes the role of managerial pay, its importance, determinants, and impact on organizations. It analyzes recent topics in executive compensation, such as pay in high technology firms, managerial risk taking, rewards in family companies, and the link between compensation and social responsibility and ethical issues, among others. The authors provide a thorough and comprehensive review of the vast literatures relevant to compensation and revisit debates grounded in different theoretical perspectives. They provide insights from disciplines as diverse as management, economics, sociology, and psychology, and amplify previous discussions with the latest empirical findings on compensation, its dynamics, and its contribution to firm overall performance.

This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral and corporate inversions. Moreover, it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1 percent—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time. The literature on tax avoidance still has several unresolved puzzles and blind spots that require further research.

Artificial intelligence (AI) has grown in presence in asset management and has revolutionized the sector in many ways. It has improved portfolio management, trading, and risk management practices by increasing efficiency, accuracy, and compliance. In particular, AI techniques help construct portfolios based on more accurate risk and return forecasts and more complex constraints. Trading algorithms use AI to devise novel trading signals and execute trades with lower transaction costs. AI also improves risk modeling and forecasting by generating insights from new data sources. Finally, robo-advisors owe a large part of their success to AI techniques. Yet the use of AI can also create new risks and challenges, such as those resulting from model opacity, complexity, and reliance on data integrity.

Congress and the Obama Administration have expressed interest in addressing multinational corporations' ability to shift profits into low- and no-tax countries with little corresponding change in business operations. Several factors appear to be driving this interest. Economists have estimated that profit shifting results in significant tax revenue losses annually, implying that reducing the practice could help address deficit and debt concerns. Profit shifting and base erosion are also believed to distort the allocation of capital as investment decisions are overly influenced by taxes. Fairness concerns have also been raised. If multinational corporations can avoid or reduce their taxes, other taxpayers (including domestically focused businesses and individuals) may perceive the tax system as unfair. At the same time, policymakers are also concerned that American corporations could be unintentionally harmed if careful consideration is not given to the proper way to reduce profit shifting. This book is intended to assist Congress as it considers what, if any, action to curb profit shifting. This book discusses the methods used for shifting profits only to the extent that it is necessary for interpreting the data or discussing policy options. In addition, this book addresses tax havens; basic concepts and policy issues of U.S. international corporate taxation; and reforms of U.S. international taxation.