Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004

Bibliographic Details
Main Author:	Jiang, Danyang
Language:	English
Published:	The Ohio State University / OhioLINK 2019
Subjects:	Accounting
Online Access:	http://rave.ohiolink.edu/etdc/view?acc_num=osu1563530428685029

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spelling	ndltd-OhioLink-oai-etd.ohiolink.edu-osu15635304286850292021-08-03T07:12:04Z Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004 Jiang, Danyang Accounting This paper investigates the renegotiation of action-specific covenants under the American Jobs Creation Act of 2004 (AJCA). I examine whether firms are more likely to renegotiate their dividend and capital expenditure covenants due to the repatriation of foreign earnings. I document that dividend covenants prevent firms from repatriating foreign earnings, and capital expenditure covenants do not significantly affect repatriation decisions. More importantly, repatriating firms are more likely to renegotiate and relax dividend covenants, yet state-contingent thresholds in these covenants are shown to reduce the probability of renegotiation. I also find evidence that firms, especially those with high growth opportunities, are more likely to renegotiate and relax their capital expenditure restrictions after repatriation. I document that repatriating firms do not increase their payout or capital expenditures after relaxing covenant limits compared to non-repatriating firms. My findings suggest that borrowers renegotiate the action-restrictions with the lenders without covenant violation concerns. This study also sheds light on the role of state-contingent covenant thresholds in debt contracting literature and improves our understanding of the implications of action-specific covenants for tax policies. 2019-11-06 English text The Ohio State University / OhioLINK http://rave.ohiolink.edu/etdc/view?acc_num=osu1563530428685029 http://rave.ohiolink.edu/etdc/view?acc_num=osu1563530428685029 unrestricted This thesis or dissertation is protected by copyright: some rights reserved. It is licensed for use under a Creative Commons license. Specific terms and permissions are available from this document's record in the OhioLINK ETD Center.
collection	NDLTD
language	English
sources	NDLTD
topic	Accounting
spellingShingle	Accounting Jiang, Danyang Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004
author	Jiang, Danyang
author_facet	Jiang, Danyang
author_sort	Jiang, Danyang
title	Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004
title_short	Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004
title_full	Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004
title_fullStr	Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004
title_full_unstemmed	Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004
title_sort	repatriation and renegotiation: action-specific covenants and firms’ responses to the american jobs creation act of 2004
publisher	The Ohio State University / OhioLINK
publishDate	2019
url	http://rave.ohiolink.edu/etdc/view?acc_num=osu1563530428685029
work_keys_str_mv	AT jiangdanyang repatriationandrenegotiationactionspecificcovenantsandfirmsresponsestotheamericanjobscreationactof2004
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Repatriation and Renegotiation: Action-Specific Covenants and Firms’ Responses to the American Jobs Creation Act of 2004

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