We test the effect of an important electoral reform implemented in Italy from 1993 to 2001, that moved the system for electing the Parliament from purely proportional to a plurality rule (for 75% of the seats). We do not find any effect on either the number of parties or the stability of...

The capital structure of foreign affiliates is analyzed using a large panel of German multinationals. While taxes are found to encourage debt finance in general, adverse local credit market conditions result in lower external borrowing but higher internal debt indicating that the two channels of...