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Can Time-Varying Currency Risk Hedging Explain Exchange Rates?

Bräuer, Leonie; Hau, Harald - 2022

bond positions, which creates a net hedging demand for dollar assets that depreciates USD rates in both the forward and … spot markets. We document the time-varying nature of this net hedging demand and show how it relates to eco … FX hedging pressure can account for approximately 30% of all monthly variation in the seven most important dollar …

Persistent link: https://www.econbiz.de/10014242128

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

Firms' financial choices and thin capitalization rules under corporate tax competition

Haufler, Andreas; Runkel, Marco - 2008

Thin capitalization rules have become an important element in the corporate tax systems of developed countries. This paper sets up a model where national and multinational firms choose tax-efficient financial structures and countries compete for multinational firms through statutory tax rates...

Persistent link: https://www.econbiz.de/10010264461

The Role of Human Capital in Structural Change and Growth in an Open Economy : Innovative and Absorptive Capacity Effects

Bye, Brita; Fæhn, Taran - 2021

Since the financial crisis in 2008, slow growth has riddled Europe and the Covid-19 pandemic is amplifying the challenge. Promoting economic growth and transforming to a more knowledge-based industrial structure will be high on the agenda for the coming decades. We study how more and better...

Persistent link: https://www.econbiz.de/10013249658

A Q-Theory of Banks

Begenau, Juliane; Bigio, Saki; Majerovitz, Jeremy; … - 2021

We propose a dynamic bank theory with a delayed loss recognition mechanism and a regulatory capital constraint at its …

Persistent link: https://www.econbiz.de/10013323873

Risk Pooling, Leverage, and the Business Cycle

Dindo, Pietro - 2020

This paper studies the impact of financial sector size and leverage on the business cycle and risk-free rates dynamics. We develop a general equilibrium model of a productive economy where financial intermediaries provide costly risk mitigation to households by pooling the idiosyncratic risks of...

Persistent link: https://www.econbiz.de/10012848320

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

Menoncin, Francesco; Panteghini, Paolo M.; 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 evidence, we...

Persistent link: https://www.econbiz.de/10013314671

The Importance of Escape Clauses : Firm Response to Thin Capitalization Rules

Andresen, Martin Eckhoff; Thorvaldsen, Lars - 2023

Escape clauses, where small firms are exempt from particular tax rules, is a crucial feature of a number of corporate tax schemes, but creates incentives to avoid taxation by manipulating the measures that determine inclusion. We evaluate the impact of thin capitalization rules, which commonly...

Persistent link: https://www.econbiz.de/10014263916

Profit shifting by debt financing in Europe

Barion, Francesca; Miniaci, Raffaele; Panteghini, Paolo M. - 2010

This article aims at analyzing the link between subsidiaries' capital structure and taxation in Europe. First we introduce a trade-off model, which studies a MNCs' financial strategy and shows how debt policy allows multinational groups to shift profits from low-tax to high-tax jurisdictions. By...

Persistent link: https://www.econbiz.de/10010276152

International debt shifting: Do multinationals shift internal or external debt?

Møen, Jarle; Schindler, Dirk; Schjelderup, Guttorm; … - 2011

Multinational companies can exploit the tax advantage of debt more aggressively than national companies by shifting debt from affiliates in low tax countries to affiliates in high tax countries. Previous papers have either omitted internal debt or external debt from the analysis. We are the...

Persistent link: https://www.econbiz.de/10010277407