DESAI, MIHIR A.; FOLEY, C. FRITZ; HINES, JAMES R. - In: Journal of Finance 59 (2004) 6, pp. 2451-2487
This paper analyzes the capital structures of foreign affiliates and internal capital markets of multinational corporations. Ten percent higher local tax rates are associated with 2.8% higher debt/asset ratios, with internal borrowing being particularly sensitive to taxes. Multinational...