firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and …. Debt, however, has an adverse effect on the enforceability of these arrangements because too much debt increases the firm … analysis provides an explanation for why some firms only use little debt financing. Predictions made by our theory are in line …

firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and …. Debt, however, has an adverse effect on the enforceability of these arrangements because too much debt increases the firm … analysis provides an explanation for why some firms only use little debt financing. Predictions made by our theory are in line …

firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and …. Debt, on the other hand, has an adverse effect on the enforceability of these arrangements because too much debt increases … creditors. Our analysis provides an explanation for why some firms only use little debt financing. Predictions made by our …

the parent and the affiliates; (iv) both parental debt and external debt increase when the tax rate increases, all else … tax jurisdiction. This paper discusses the link between capital structure choices and tax planning motives in … multinational groups. We model the trade-off between the use of external debt, parental debt and an internal bank. We test the …

approximately 2% of firm value for a firm whose credit rating falls from AA to BBB, comparable to the magnitude of debt tax benefits …

debt is not too high. The reason is that a firm's commitment in relational contracts is determined by its future profits in … the cooperative relationship, and the need to repay debt reduces future profits. We therefore derive the prediction that …, on average, higher costs of enforcing formal contracts should be associated with firms having less leverage. We test this …

from 1996 until 2003. In accordance with the theoretical predictions, the effect of local taxes on leverage is positive for … both types of debt. Moreover, while adverse local credit market conditions are found to reduce external borrowing, internal … debt is increasing, supporting the view that the two channels of debt finance are substitutes. …