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Thin Capitalization Rules and Multinational Firm Capital Structure
Blouin, Jennifer - 2014
This paper examines the impact of thin capitalization rules that limit the tax deductibility of interest on the capital structure of the foreign affiliates of US multinationals. We construct a new data set on thin capitalization rules in 54 countries for the period 1982-2004. Using confidential...
Persistent link: https://www.econbiz.de/10013058436
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Network Determinants of Cross-Border Merger and Acquisition Decisions
Didier, Tatiana - 2020
This paper assesses whether cross-border M&A decisions exhibit network effects. We estimate exponential random graph models (ERGM) and temporal exponential random graph models (TERGM) to evaluate the determinants of cross-country M&A investments at the sectoral level. The results show that...
Persistent link: https://www.econbiz.de/10012843316
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At a Cost : The Real Effects of Thin Capitalization Rules
De Mooij, Ruud A.; Liu, Li - 2021
Thin capitalization rules (TCRs) aim to mitigate profit shifting by multinational corporations (MNCs) but, by raising the cost of capital for affected affiliates, can also negatively affect real investment. Exploiting unique panel data on multinational companies in 34 countries during 2006-2014,...
Persistent link: https://www.econbiz.de/10013243062
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Fiscal Consolidation and the Cost of Credit : Evidence from Syndicated Loans
Agca, Senay - 2013
We examine how the cost of corporate credit varies around fiscal consolidations aimed at reducing government debt. Using a new dataset on fiscal consolidations and syndicated corporate loan data, we find that loan spreads increase with fiscal consolidations, especially for small firms, domestic...
Persistent link: https://www.econbiz.de/10013086310
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Taxation, Bank Leverage, and Financial Crises
De Mooij, Ruud A. - 2013
That most corporate tax systems favor debt over equity finance is now widely recognized as, potentially, amplifying risks to financial stability. This paper makes a first attempt to explore, empirically, the link between this tax bias and the probability of financial crisis. It finds that...
Persistent link: https://www.econbiz.de/10013085611
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Taxation and Leverage in International Banking
Gu, Weishi - 2013
-asset ratio in light of the traditional debt bias; and (ii) whether international corporate tax differentials vis-a-vis foreign … subsidiary banks affect the intra-bank capital structure through international debt shifting. Using a novel subsidiary … significantly, through both the traditional debt bias channel and the international debt shifting that is due to the international …
Persistent link: https://www.econbiz.de/10013088733
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Taxation and Corporate Debt : Are Banks Any Different?
Heckemeyer, Jost - 2013
This paper explores whether corporate tax bias toward debt finance differs between banks and nonbanks,using a large panel of micro data. On average, it finds that there is no significant difference. The marginal tax effect for both banks and non-banks is close to 0.2. However, the responsiveness...
Persistent link: https://www.econbiz.de/10013072629
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Excessive Private Sector Leverage and Its Drivers : Evidence from Advanced Economies
Jarmuzek, Mariusz - 2017
Nonfinancial private sector debt increased significantly in advanced economies prior to the global financial crisis and, with a few exceptions, deleveraging has been limited. Furthermore, in some countries households and corporations have continued to accumulate debt. Drawing on the literature,...
Persistent link: https://www.econbiz.de/10012956484
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Curbing Corporate Debt Bias
De Mooij, Ruud A. - 2017
Tax provisions favoring corporate debt over equity finance ('debt bias') are widely recognized as a risk to financial stability. This paper explores whether and how thin-capitalization rules, which restrict interest deductibility beyond a certain amount, affect corporate debt ratios and mitigate...
Persistent link: https://www.econbiz.de/10012960580
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Pouring Oil on Fire : Interest Deductibility and Corporate Debt
Dallari, Pietro - 2019
This paper investigates the role of tax incentives towards debt finance in the buildup of leverage in the nonfinancial corporate (NFC) sector, using a large firm-level dataset. We find that so-called debt bias is a significant driver of leverage, for both small and medium-sized enterprises and...
Persistent link: https://www.econbiz.de/10012895074