Crossborder Dividend Taxation and the Preferences of Taxable and Nontaxable Investors: Evidence From Canada

Loading...
Thumbnail Image
Penn collection
Finance Papers
Degree type
Discipline
Subject
Economic Theory
Finance and Financial Management
Taxation
Funder
Grant number
License
Copyright date
Distributor
Related resources
Author
Christoffersen, Susan Elizabeth Kerr
Geczy, Christopher C
Musto, David K
Reed, Adam V
Contributor
Abstract

We consider how fund managers respond to the conflicting preferences of their investors. We focus on the conflict between the taxable and retirement accounts of international funds, which face different tradeoffs between dividends and capital gains. In principle, managers could resolve this conflict through dividend arbitrage, but a proprietary database of dividend-arbitrage transactions shows that in practice they cannot. Thus, managers must resolve it through their investment policies. We find robust evidence that managers with more retirement money favor the preferences of retirement investors and further evidence for this view in the difference between U.S. and Canadian funds’ portfolio weights.

Advisor
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Publication date
2005-01-01
Journal title
Journal of Financial Economics
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
Recommended citation
Collection