Research

Capital Gains Taxes, Pricing Spreads, and Arbitrage: Evidence from Cross‐Listed Firms in the U.S.
The Accounting Review, 2009

This study by Associate Professor Michelle Yetman and co-authors Jennifer Blouin and Luzi Hail from the University of Pennsylvania examines how shareholder‐level taxes affect the contemporaneous pricing of foreign firms’ U.S. cross‐listed and underlying home‐country securities surrounding the 1997 reduction in U.S. capital gains tax rates.

Consistent with tax capitalization, the authors find that the performance of cross‐listed shares is negatively related to dividend yield, suggesting an abnormal price increase for shares with greater anticipated taxable capital gains. Due to barriers to cross‐border arbitrage, underlying home‐country securities, on average, do not react during the event, creating a temporary tax‐induced pricing spread. When costs of arbitrage are low, the pricing disparity quickly dissipates and home‐country shares closely mirror the pricing of their cross‐listed counterparts.

In further tests, the authors are unable to document lock‐in behavior, which predicates a decrease in prices attributable to a surge in volume for shares with greater accrued taxable capital gains. Overall, these findings suggest that an exogenous shock to the U.S. tax regime reverberates in international asset prices, thereby affecting foreign firms’ costs of capital.

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News Release

UC Davis Graduate School of Management partners with Lawrence Livermore and Sandia National Labs to drive technologies from lab to market

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(Davis, Calif.) – With a joint goal of speeding the transfer of new technologies from the laboratory to the commercial marketplace, the UC Davis Graduate School of Management, Lawrence Livermore National Laboratory and Sandia National Laboratories have announced a new partnership for researchers to develop their entrepreneurial skills.

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Vickie Sherman MBA 13 Finds Her Passion, Her Career—and Herself

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MBA Student Consultants Make an IMPACT
Projects Put Business Needs Front and Center

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Agilent Technologies’ Electronic Measurement Group is a $3.6 billion business that over the past decade has seen a dramatic shift in its customer base from U.S., and Western European customers to predominantly Asia-based customers. Today, the majority of the division’s revenues are generated outside of the U.S., with an increasing concentration in China.

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UC Davis Part-Time MBA in Top 8%, Full-Time MBA in Top 9%
U.S. News & World Report’s latest rankings: This marks the 19th consecutive year our MBA program has been ranked among the best in the nation.

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(Davis, CA) — The UC Davis Graduate School of Management’s full-time MBA program has been ranked among the top six percent of AACSB International-accredited programs nationwide, according to U.S. News & World Report’s latest graduate business school rankings released today.