@article {1970571,
	title = {Foreign Exchange Risk, Hedging, and Tax-Motivated Outbound Income Shifting},
	journal = {Journal of Accounting Research},
	volume = {58},
	year = {2020},
	month = {2020},
	pages = {953-987},
	abstract = {Although outbound income shifting to low-tax jurisdictions provides tax savings, it is often accompanied by nontax costs. In this study, I examine whether foreign exchange (FX) risk constrains tax-motivated outbound income shifting by U.S. multinational corporations. My findings indicate that exposure to greater currency volatility is associated with less outbound income shifting, and this effect is stronger for firms with foreign affiliates using foreign functional currencies. I also investigate whether hedging facilitates outbound income shifting. Consistent with hedging lowering costs associated with exchange rate volatility, I find that U.S. firms that use more currency derivatives tend to shift more income to low-tax foreign jurisdictions. Overall, these findings suggest that FX risk is an important cost of outbound income shifting.},
	keywords = {Accounting},
	url = {https://onlinelibrary.wiley.com/doi/10.1111/1475-679X.12326},
	author = {Deng,Junfang}
}
