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On the Capital Structure of Foreign Subsidiaries : Evidence from a Panel Data Quantile Regression Model

Miniaci, Raffaele; Panteghini, Paolo - 2021

This paper studies how variations in tax rates and profitability affect the (unconditional) quantiles of the distribution of the leverage of European foreign owned subsidiaries in the presence of unobserved company characteristics, possibly correlated with their observable dimensions. To achieve...

Persistent link: https://www.econbiz.de/10013226660

Debt Shifting and Transfer Pricing in a Volatile World

Comincioli, Nicola; Panteghini, Paolo; Vergalli, Sergio - 2021

In this article we introduce a stochastic model with a multinational company (MNC) that exploits tax avoidance practices. We focus on both transfer pricing (TP) and debt shifting (DS) activities and show how their optimal level is chosen by the shareholders. In addition, we perform an extensive...

Persistent link: https://www.econbiz.de/10013251265

Business tax policy under default risk

Comincioli, Nicola; Vergalli, Sergio; Panteghini, Paolo - 2019

In this article we use a stochastic model with one representative firm to study business tax policy under default risk. We will show that, for a given tax rate, the government has an incentive to reduce (increase) financial instability and default costs if its objective function is welfare (tax...

Persistent link: https://www.econbiz.de/10012052770

Deferred Taxation under Default Risk

Carini, Cristian; Moretto, Michele; Panteghini, Paolo; … - 2018

In this article, we have used a continuous EBIT-based model to study deferred taxation under default risk. Quite … surprisingly, default risk has been disregarded in research on deferred taxation. In order to underline its importance, we first … were close enough to default. Hence, these taxpayers should not consider deferred taxation in their financial statements …

Persistent link: https://www.econbiz.de/10011872114

Public Expenditure Spillovers: An Explanation for Heterogeneous Tax Reaction Functions

Levaggi, Rosella; Panteghini, Paolo - 2018

This article provides a possible explanation for the heterogeneity of tax reaction functions under tax competition. In particular, we assume the existence of three jurisdictions, i, j and z, as well as of spillovers. Given this simple framework, we show that if jurisdictions compete to attract...

Persistent link: https://www.econbiz.de/10011932040

Optimal Firm's Dividend and Capital Structure for Mean Reverting Profitability

Menoncin, Francesco; Panteghini, Paolo; Regis, Luca - 2021

We model a risk-averse firm owner who wants to maximize the intertemporal expected utility of firm’s dividends. The optimal dynamic control problem is characterized by two stochastic state variables: the equity value, and profitability (ROA) of the _rm. According to the empirical evi-dence, we...

Persistent link: https://www.econbiz.de/10012799707

A Welfare Analysis on Start-Up Decisions under Default Risk

Comincioli, Nicola; Panteghini, Paolo; Vergalli, Sergio - 2021

This short article studies the tax effects on a start-up investment decision under uncertainty. Since the representative firm can decide both when to invest and how much to borrow, the distortive effects are twofold. We thus show that the deadweight loss (namely, the ratio between the welfare...

Persistent link: https://www.econbiz.de/10012799778

The Estimation of Reaction Functions under Tax Competition

Miniaci, Raffaele; Panteghini, Paolo; Rivolta, Giulia - 2018

Tax competition has long been studied using panel models. According to this approach, each country’s tax rate is assumed to depend on a weighted average of the tax rates applied in the rest of the world, where weights are exogenous. As a consequence, the estimated reaction functions of...

Persistent link: https://www.econbiz.de/10011815821

Endogenous Timing and the Taxation of Discrete Investment Choices

Panteghini, Paolo - 2002

This article discusses the effects of taxation on the discrete choice of alternative projects. In particular, it is … shown that if taxation affects the optimal timing of irreversible investment, then the discrete choice is distorted as well …

Persistent link: https://www.econbiz.de/10010315345

Competing for Foreign Direct Investments: A Real Options Approach

Panteghini, Paolo; Schjelderup, Guttorm - 2003

This paper uses the Bad News Principle to study how the ability of multinationals to shift profits by transfer pricing affects both the timing of foreign direct investment decisions and government tax policy. A main finding of the paper is that if countries compete to attract foreign direct...

Persistent link: https://www.econbiz.de/10010315782