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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

The Impact of Delay: Evidence from Formal Out-of-Court Restructuring

Srhoj, Stjepan; Kovač, Dejan; Shapiro, Jacob N.; … - 2021

Bankruptcy restructuring procedures are used in most legal systems to decide the fate of businesses facing financial hardship. We study how bargaining failures in such procedures impact the economic performance of participating firms in the context of Croatia, which introduced a "pre-bankruptcy...

Persistent link: https://www.econbiz.de/10012657954

Debt Recovery in Firm Liquidations: Do Liquidation Trustees Matter?

Cepec, Jaka; Grajzl, Peter; Zajc, Katarina - 2016

Insolvency systems play a crucial role in protection of creditor rights, yet micro-level empirical evidence on the … functioning of insolvency regimes worldwide is sparse. We investigate whether creditors’ recovery of outstanding claims, a measure … of ex-post efficiency of an insolvency regime, depends on the characteristics of the trustee delegated the administration …

Persistent link: https://www.econbiz.de/10011522534

When Credit Dries Up: Job Losses in the Great Recession

Bentolila, Samuel; Jansen, Marcel; Jiménez, Gabriel; … - 2013

We use a unique dataset to estimate the impact of a large credit supply shock on employment in Spain. We exploit marked differences in banks' health at the onset of the Great Recession. Several weak banks were rescued by the State and they reduced credit more than other banks. We compare...

Persistent link: https://www.econbiz.de/10010328737

Unexpected Loan Losses and Bank Capital in an Estimated DSGE Model of the Euro Area

Hristov, Nikolay; Hülsewig, Oliver - 2016

We develop a stylized DSGE model in which banks face capital regulation and their loan portfolios are subject to non-diversifiable losses due to aggregate shocks. The framework is used to explore the importance of the interaction between macroeconomic conditions, credit default and bank...

Persistent link: https://www.econbiz.de/10011584859

Flexible Prices and Leverage

D'Acunto, Francesco; Liu, Ryan; Pflueger, Carolin; … - 2017

The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most exible-price firms have a 19% higher long-term leverage ratio than the most sticky-price firms, controlling for known determinants of capital...

Persistent link: https://www.econbiz.de/10011615872

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

Low Inflation: High Default Risk AND High Equity Valuations

Bhamra, Harjoat S.; Dorion, Christian; Jeanneret, Alexandre - 2018

We develop an asset-pricing model with endogenous corporate policies that explains how inflation jointly impacts real asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal coupons and sticky profitability. Taken together, these two...

Persistent link: https://www.econbiz.de/10011957207

A simple explanation for the unfavorable tax treatment of investment costs

Panteghini, Paolo M. - 2006

The evidence shows that in most countries the present value of depreciation allowances is less than 100% of the cost of capital. In this article we use a real-option model with debt financing, and show that less favorable depreciation allowances are offset by tax benefits arising from debt...

Persistent link: https://www.econbiz.de/10010263966

Preemption, start-up decisions and the firms' capital structure

Moretto, Michele; Panteghini, Paolo M. - 2007

In this article, we analyse the interactions between financial and start-up decisions in an oligopolistic framework, where firms compete to enter a new market. We show that preemption can substantially reduce the negative effects of credit rationing on start-up investment decisions.

Persistent link: https://www.econbiz.de/10010264136

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