Corruption, national culture, law and dividend repatriation policy

摘要

This study aims to examine the effect of corruption, national culture, and rule of law on the dividend repatriation policy of foreign subsidiaries of US multinational corporations (MNCs) in 51 countries. The findings reveal that foreign subsidiaries of US MNCs repatriate lower dividends from host countries that have a higher rate of corruption. Additionally, findings suggest that foreign subsidiaries of US MNCs repatriate higher dividends from individualistic countries. Further, weak legal protection in the host country leads to higher dividend repatriation. Moreover, given an effective legal system in a host country, foreign subsidiaries of US MNCs with higher growth opportunities repatriate lower dividends. Finally, this study finds that foreign subsidiaries of US MNCs functioning in countries with a higher rate of corruption, individualistic culture, and the strict rule of law adjust faster towards optimal dividend repatriation policy. The findings are robust to alternative estimation methods and measures. (C) 2020 Elsevier B.V. All rights reserved.