thin capitalization rules when multinationals can also shift income via transfer prices. We show that while permissive thin …

utilizing the standard debt tax shield, multinationals can shift debt from affiliates in low-tax countries to affiliates in high …-tax countries. We study the capital structure of multinationals and expand previous theory by incorporating debt tax shield effects …. Testing our model using a large panel of German multinationals, we identify all three debt tax shields. Our estimates suggest …