We examine financial constraints and forms of finance used for investment, byanalysing survey data on 157 large privatised companies in Hungary and Poland for theperiod 1998 – 2000. The Bayesian analysis using Gibbs sampling is carried out toobtain inferences about the sample companies’...

This paper analyzes the effectiveness of thin-capitalization rules in preventing debt financeby intercompany loans and explores their consequences for corporate decisions. A theoreticaldiscussion emphasizes that limitations of the deduction of interest owed to foreign afiliateswould not only...