TCJA Effects Tracker

Shareholder Wealth Effects of Border Adjustment Taxation

Friday March 15, 2019


Following two decades of discussion, the border adjustment tax briefly emerged as part of proposed U.S. corporate tax reform in early 2017. While heavily debated, little empirical evidence exists regarding the border adjustment tax. We take advantage of the period during which the border adjustment tax was under strong consideration to examine its effects on shareholder value. We find that high-importing firms (measured using industry, aggregate government industry data, and firm-level shipping container data) suffer negative returns on days the tax had a greater likelihood of adoption. We also find that firms lobbying for border adjustment experience positive returns over that same time period.


Gaertner, Fabio B. and Hoopes, Jeffrey L. and Maydew, Edward L., Shareholder Wealth Effects of Border Adjustment Taxation (March 15, 2019). Journal of Law and Economics. Forthcoming 2019.  Kenan Institute of Private Enterprise Research Paper No. 18-2. Available at SSRN: